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Compensation of business expenses

On March 29, 2016 by Dutch Umbrella Company

If you’re working as an employee in the Netherlands you receive a gross salary. However, there are certain business expenses your employer could compensate you for, apart from your gross salary. Your employer can pay you as an employee a (limited) fixed net compensation for small expenses that you haven’t declared, like travel costs, business telephone costs, promotional gifts or other expenses that are related to representation costs. The compensation of these representation costs have to concern business expenses.

There are a few rules that decide whether expenses can be compensated or not, especially when it comes to travel costs and the use of hardware.

Travel allowance

Do you travel to work with your own transportation, like a car? Then your employer can compensate you for a maximum of € 0,19 per kilometer without having to pay any taxes over it. Does your employer pay a higher travel allowance? In that case everything above € 0,19 per kilometer will be treated as wages and thus taxed accordingly.

If you travel to work by public transport your employer can either choose to compensate the kilometers you traveled up to € 0,19 per kilometer, or the actual travel costs you made, like train tickets or travel cards. Both ways of compensation are tax free. There are no rules regarding the maximum distance you are allowed to receive compensation for. Your employer can decide what the maximum number of compensated kilometers is.

Telephone costs and computers

Telephone costs can usually be compensated by your employer tax free, as long as these are considered business expenses for at least 10%. It doesn’t matter if it concerns a mobile phone or a landline, and the same 10% rule applies to an internet connection. If you use a computer outside your workplace your employer may provide you with one tax free, provided the business use is at least 90%.

Other expenses that might be subject to compensation are:

  • Meals and consumptions
  • Study material, subscriptions to business literature and courses
  • Promotional gifts
  • Personal care and company fitness
  • Professional clothing and uniforms
  • Relocation and accommodation

Every employer can decide on their own rules regarding the compensation of these additional business expenses, and it also matters what kind of work you do. We advise you to inform with your employer about any business expenses that might be compensated.

Extraterritorial expenses

As a foreign employee there are extra expenses that may often be reimbursed, these are called extraterritorial expenses. In most cases these expenses are classed as wage. In this article you’ll find more information about extraterritorial expenses.

Any questions?

Would you like to know more about net compensations for business expenses, or maybe you’re not sure about what you’re entitled to as an employee? Don’t hesitate to contact us, send us an email at [email protected] and we’ll answer any questions you might have.