Make use of the free space of the work costs scheme in 2024

The free space of the work costs scheme is intended to provide tax-free allowances and to provide benefits to employees. The size of the free space is determined by the fiscal payroll. If there is still free space on December 31, 2024 this is lost, because the remainder of the free space cannot be carried over to the next year. If the free space is exceeded, the employer owes 80% final levy on the excess. Employers do this it is therefore a good idea to now look at the status of the free space in 2024 and whether there are still opportunities to make optimal use of this.

Free space

In 2024, the tax-free allowance will be 1.92% on the first €400,000 of the tax payroll and 1.18% on the remainder of the fiscal payroll. Will be at the end of the if the calendar year exceeds the free space, the employer is liable for 80% payroll tax (final levy) due on the excess. Too many compensations and charging benefits to the free space can therefore be financially disadvantageous unpack for the employer. The 80% final levy must be included in the payroll tax return for February 2025 and to be paid no later than the end of March 2025. What can be charged to the free space?

If there is any free space left, this can be used for the following reimbursements, for example:

- Cash bonus/end-of-year bonus: a bonus/end-of-year bonus of up to €2,400 per employee.

- Christmas package: the value of the Christmas package (incl. VAT).

- Sinterklaas gift: the value (incl. VAT) of the Sinterklaas gift or a chocolate letter with Sinterklaas.

- Christmas party/drinks/dinner: if this is given externally, the total costs (incl. VAT) are charged to the available space. If the Christmas party etc. is given at the workplace, the drinks and small refreshments tax-free and the flat rate of €3.90 per meal can be used

person to be charged to the free space (instead of the actual cost of the meal). The cost of entertainment should to be charged in full (incl. VAT) to the available space.

- Gym memberships: the costs (incl. VAT) of providing or (partial) reimbursement of this can be charged to the available space

- Cost reimbursements: net cost reimbursements that are not substantiated and specified by nature and type must be charged to the free space gross expense allowances can be charged to the free space is brought in, in this way the net expense allowances.

- Company bicycle: this can be provided in various ways or (partly) reimbursed and also (partly) charged to the free space. Also through exchange of gross wages.

- Cafeteria system/exchange of gross salary components: this is also possible under

conditions under which the free space is used, for example to the exchange of bonus/vacation days for a bicycle, for solar panels or against a heat pump.

- Any other compensation and/or benefits to employees as long as the customary criterion is met. That is to say, the compensation or provision may not be unreasonably high and must be in line with what customary within employment relationships. What is customary can vary sector/industry differ, but should generally correspond to what other employers would do the same. In doing so, a reimbursement/provision considered normal as long as it is no longer deviates by more than 30% from what is customary in similar situations. Incidentally, it is up to the tax authorities to demonstrate that this would not be customary. Conclusion

A smart use of the free space in the work costs scheme offers financial benefits. For this the employer must act proactively. If there are still free If there is space left in 2024, it is wise to consider to what extent this can still be used can be made of. If the free space is not used in 2024, it will expire. If the free space is exceeded in 2024, the employer will be liable for 80% final tax due, which must be paid by the end of March 2025.