Evaluation of the work-related costs scheme (WKR)

The then State Secretary for Finance, Tjebbe van Ooostenbruggen, submitted the long-awaited evaluation of the work-related costs scheme (WKR) to the House of Representatives in July 2025. The research bureau SEO Economisch Onderzoek examined the scheme. Its conclusion: the WKR achieves its main objective of providing tax-free allowances, provisions and employment benefits for work-related costs but the main obstacle to the effectiveness of the scheme is the complexity of the system and the large administrative burden that this places upon both employers and the Tax and Customs Administration. Owing to its complexity some employers choose not to apply the WKR at all, or fail to make optimum use of it. This is an area of concern in terms of its effectiveness. Improvements can be made within the WKR system, such as providing clearer guidance on the designation of allowances, the scope of specific exemptions and ensuring greater stability in the structure of the scheme. These modifications could help to make its application more efficient and reduce implementation costs.

The evaluation has led to some concrete recommendations, such as applying inflation indexation to the efficacy threshold of the customary criterion (now €2,400), introducing a specific exemption for directors’ and officers’ (D&O) liability insurance and the abolition of the first band of the tax-free budget up to a wage bill of €400,000. 

Even before the summer questions had been raised in Parliament about the possible introduction of a specific exemption for the repayment of student loans. The evaluation did not specifically address this issue, except to recommend caution in the use of the WKR to achieve additional (secondary) policy objectives. 

We await to see what Budget Day brings and whether some recommendations will be adopted right away or whether that will be left to the next Cabinet.