Work costs scheme: extra from the boss changes

From January 2011, an employee can no longer count on many perks from the boss. The reason is that the government has imposed it that way. The tax rules for compensation that an employer can give to an employee have changed significantly with effect from 1 January 2011. So from 2011 onwards, the boss will be able to give far fewer perks to his staff. Everyone will notice that this work costs scheme will increase to 1.4 percent. A bonus from the boss is often not available next year.

Now 29 arrangements for a gift from the boss

In 2010, there are still 29 regulations that regulate what a boss can give to his employee at Christmas, New Year’s Eve and on other days. This concerns extras on top of the salary that someone earns. These 29 schemes will therefore be replaced by the so-called work costs scheme.

Work costs scheme: only 1.4 percent of the wage can be spent on a bonus

The work costs scheme states that an employer may donate only 1.4 percent of the total amount that a boss gives as wages to his employer tax-free. Anyone who wants to do anything extra will be presented with a hefty bill. 80 percent tax must be paid on these amounts.

Make your own choice in the work costs scheme

Within that budget of 1.4 percent, you can make your own choice. The boss himself decides what compensation he gives in addition to the salary. There will be six exemptions for, among other things, travel and study costs and accommodation costs. Reimbursements for mobile telephones and laptops no longer count in the work costs scheme. However, the rules will be abolished for company bicycles and reimbursements for company outings.

What is covered by the 1.4 percent scheme?

It is not easy for employers to buy all kinds of extras for staff within the budget of 1.4 percent. The scheme includes, among other things:

  • Christmas packages
  • Company outings
  • The company bicycle
  • Fitness subscription
  • Reimbursements for teleworking facilities
  • Reimbursements for the internet subscription at home
  • Reimbursement for professional literature

Perk from the boss: there is little left in 2011

A boss who believes that he should compensate his employee for the fact that he works from home a lot or who gives a bicycle for commuting can continue to do so, but then has to deny someone his Christmas gift, for example. It has to be either lengthwise or widthwise. Employees who can buy from their own company with discounts are also victims. These discounts are all included in the extras.

Staff outings: fear of disappearance

Many organizers of company parties think that the knife is put in first.

Christmas package from the boss: the 70 euro scheme expires

If a boss does not provide many extras, the staff may receive an extra large Christmas package in 2011. In 2010, the regulation still applies that such a package may not cost more than 70 euros, but this limit no longer applies in the work costs regulation.

Transitional arrangement for compensation from the boss to the employee

The government allows employers to decide for themselves whether they want to continue using the old rules for the next three years. This is a kind of transitional law. The new scheme will probably come into effect definitively in 2014, so there will no longer be a choice: no more than 1.4 percent of the salary may be spent on company gifts. Many administration offices and accountants are currently busy calculating when the right time is to switch to the new scheme.

Tax relief of 124 million euros

The company’s new perks scheme should ultimately result in a tax reduction of 124 million euros.

Update: the work costs scheme will be introduced later

The mandatory introduction of the work costs scheme has been postponed until January 1, 2015. State Secretary Weekers of Finance wants to simplify the work costs scheme and thus make it more attractive for SMEs. Companies can therefore still choose next year whether or not to use it.