Even if you have already implemented the Labour Costs Scheme, you can find out the latest information here*.
*This file is based on the changes proposed in the 2015 Tax Plan.
After the webinar, you know where you stand and you can get started with the Labour Costs Scheme, or – if you have already implemented the Labour Costs Scheme – you can take action regarding any changes!
Watch the webinnar:
If the sum of the labour costs is higher than 1.2% of the total wage bill,
you are required to pay 80% final levy on the excess.
An analysis of the consequences is important because there may be consequences for the employment conditions policy and the financial administration.
Anything that an employer grants or reimburses to an employee is considered in the first instance as part of the wages. This also includes reimbursement of expenses! Therefore, this is what you should investigate first. The regular wages of the employee in terms of employment legislation, for example including a company car and the benefit of using company accommodation, will continue to be taxed.
You can designate all other wage components, such as reimbursements for expenses, Christmas hampers and the company bicycle, as final levy components of expense allowances. Of this, 1.2% (in 2014, 1.5%) of the total payroll tax for tax purposes is free of tax and social security contributions. This is also referred to as the fixed exemption. The benefit is that you are no longer required to record all these items at individual employee level
You can also choose to tax the employee for certain reimbursements and/or allowances as a gross reimbursement or to gross up.
Exceeding the fixed exemption
Have your total expense allowances exceeded the fixed exemption? Then you pay 80% final levy on the excess. You have several options if you exceed the fixed exemption: 1. Accepting the overrun 2. Taxing the employee 3. Adjusting employment conditions.
When you have made your choice, the systems and processes must also be organised according to the Labour Costs Scheme. If your choice has led to the adjustment of the employment conditions policy, then this choice will have to be coordinated with the Works Council and you should inform your employees about this.
Changes announced on 'Prinjesdag' (Dutch Budget Day):
- annual settlement system;
As an employer, you will only be required to determine the tax payable under the Expense Allowance Scheme on one occasion each year.
- Group scheme;
On request, you can create a discretionary margin at group level, provided that the parent company owns at least 95% of the (second-tier) subsidiary.
- New specific exemptions;
- Limited introduction of the necessity criterion;
As an employer, if you deem it necessary for your employee to use a computer, smart phone, tablet or tools for their job, you can reimburse or provide these tax-free.
- Facilities related to the workplace (elimination of distinction between reimbursements, allowances and benefits)
There is new specific exemption, which will allow you to reimburse a number of workplace-related facilities that are currently subject to a zero valuation.
- Exemption for sector-specific products;
Discounts on purchases of the employer’s products will be included in the specific exemptions from 2015, provided that the discount per product is no more than 20% and the total discount per year does not exceed €500.
- Limited introduction of the necessity criterion;
- Foreign penalties may no longer be charged to the discretionary margin;
A more technical change is that from 2015, not only Dutch penalties, but also foreign ones can no longer be designated as taxable salary and it will become mandatory to charge the employee for these.
In order to implement these budget-neutral measures (for the government), the discretionary margin will be reduced as of 1 January 2015 to 1.2% of the fiscal wage bill.
Inventory of all reimbursements and allowances.
This allows you to chart which reimbursements and allowances you apply as the employer. In particular, this also covers all issues that are not relevant to payroll processing.
Analysis and simulations
Once you have made an inventory, you can proceed with an analysis to review the implications. You can then simulate the consequences that can be expected if you would change the way you grant reimbursements and allowances. For example, what happens if you classify a reimbursement (gross or net) as wage or if you abolish a certain reimbursement?
3. Making a choice
You can make choices based on the inventory and analysis. These choices can be best made jointly by colleagues from the financial administration, payroll administration and HR departments.
The implementation of your choices must not be underestimated. If you adjust the employment conditions, you will have to consult with the Works Council and/or the personnel representatives. Also consider preparing a communication plan in order to inform the employees.
Read the Step-by-step plan with explanations for each step.
Examples about the labour cost scheme you will find here.
Labour Costs Scheme – Telephone consultations
- Discuss current situation (on the basis of an intake form);
- Advice on the possibilities in your organisation.
Labour Costs Scheme – On Site
- Explanation of the Labour Costs Scheme;
- Step-by-step plan;
- Advice on the possibilities in the organisation.
Labour Costs Scheme – Total
- Inventory of the necessary activities;
- Analysis of the consequences for the organisation;
- Summary of any problem points;
- Support for adjustment of employment conditions and general ledger accounts;
- Supervision of the overall process.
For more information please contact ADP Secondment via +31 (0)10 - 4598694 or email us and we will contact you!
Informatie over de WKR in het Nederlands vind je hier.