The WKR in your organisation
In many companies, some superficial knowledge on the WKR exists, but this knowledge is not structurally integrated into the company’s administration and processes. When the calendar year has ended, you must calculate whether the scope of that year has been exceeded or not. By the latest, the amount due must be included in February’s payroll tax return in the following year. When not keeping track of WKR expenses, this might result significant costs. Therefore, the following question is relevant: who in your company is responsible for the WKR: Finance, HR, or Payroll?
Who is responsible for the WKR?
The payroll department is responsible for processing most of the fixed costs reimbursements and provisions, as well as the potential final levy taxes due in the payroll tax return. Some reimbursements, however, are directly processed by the financial department. Other costs, like staff outings, go through HR. Therefore, it is important to establish good coordination between the aforementioned departments.
Utilising WKR opportunities in practice
It is important to utilise the WKR correctly. To illustrate, here’s an example from practice: one of our specialists performed a WKR check at a fairly large company before they had to file the tax return. During this check, it was discovered that over 100.000 euros had been incorrectly included in the discretionary scope. Because of this, the discretionary scope had been significantly exceeded. This timely discovery prevented a lot of extra costs!
However, a check may also result in discovering that some components have not been correctly allocated to the discretionary scope for years when they should have been. This might result in possible fines and a tax interest rate of at least 8 percent over the outstanding amount.
WKR masterclass and in-house training
If you have trouble with correctly implementing the WKR into your policies, or if you are simply wondering whether you are utilising the WKR optimally, we offer a WKR masterclass (only in Dutch) in which we share the latest insights into the Work-Related Costs Scheme. We highly recommended this training for HR, payroll, or finance professionals dealing with the WKR. This masterclass can take place online, in-house, or at another location: you decide on how to attend.
Are you utilising the WKR optimally?
Labour costs form a large part of your total costs as an employer. The WKR describes which part of your labour costs are taxed, which parts are exempt, and which parts may be allocated to the discretionary scope. In practice, we see that employers often do not have a clear understanding of the opportunities offered by the WKR. A correct implementation of this scheme not only reduces your risk of a Tax Authority assessment, but it may also allow for significant savings.
As an example, we conducted a WKR administration check for an international business service provider. The client sought clarification because the rules and communication from the Tax Administration were not clear to them. The WKR-analysis confirmed that their approach was generally correct, though it also revealed some areas of improvement, such as a risk with untaxed expense reimbursements due to lack of substantiation. Additionally, it was revealed that some wage components could be allocated to the discretionary scope. This resulted in saving of tens of thousands of euros per year!
Our WKR analysis can identify inaccuracies in the implementation of the WKR within your tax data. It may help you minimise risks and discover opportunities. This provides insight and assurance, allowing you to demonstrate to your stakeholders that you are in control.
Customer Case: BDP International
“How can the Work-Related Costs Scheme be implemented with a view to the future? And are we utilising the scheme to its full potential?” Danielle Luck, BDP International, wanted clarity on this, and our WKR analysis provided the solution.
From analysis to results
First, we selected a specific period and extracted the corresponding data, while BDP provided other relevant information. Our income tax specialists then reviewed the results of the WKR checker through Grant Thornton Sonar, our new data analytics portal. After the check had been completed, they received a digital management report with the necessary focus points regarding the WKR, from which BDP gained the desired insight.
“The check revealed aspects of the WKR that we hadn’t considered before. Besides this, we learned the documentation in our administration was not optimal, which we needed to improve.”
Daniëlle Luck, BDP International
Contact us
If you are interested in advice on your specific WKR situation, please contact us. We are here to assist you in minimising your tax risks and maximising your opportunities.
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