2023 Tax-Free Travel and Home Office Allowances

Starting in 2023, a number of Dutch tax changes will take effect, including increases in the allowance limits for travel and home office expenses. As hybrid work models are increasingly accepted as an effective employee retention tool, organisations seeking to support employees with greater flexibility while attracting and retaining talent may want to take advantage of the new limits.

Amidst rising inflation, employees have faced higher travel and home office expenses, and several of the updated provisions can allow employers to help their workforce manage these costs while broadly supporting environmental and energy consumption goals. Some of the notable changes for 2023 include:

Rising fuel costs have strained household budgets. As of January 1, 2023, the untaxed kilometre allowance for commuting will increase from 19 cents to 21 cents per kilometre. This means that employers will be able to reimburse their employees tax-free 21 cents per kilometre in 2023, helping mitigate rising fuel costs.

Employees have enjoyed the increased flexibility that working from home has offered. However, work-from-home employees absorb costs they otherwise would not have incurred if working from an office. To help cover those costs, employers may pay a daily home allowance.

The maximum working from home allowance an employer may pay out will increase from €2 to €2.15 per day in 2023. This higher allowance can help support employees facing higher costs due to rising inflation. Employers offering hybrid work arrangements should keep in mind that home allowances and travel allowances still cannot be provided on the same day.

Employers can use the discretionary margin within the work-related cost scheme (werkkostenregeling, or “WKR”), tax-free, for electric bikes, public transportation costs, and other work-related provisions and reimbursements for your employees. The discretionary margin within the WKR will expand in 2023.

In the first tier (up to and including €400,000 of the taxable salary), the discretionary margin will increase from 1.70% to 3%. In the second tier (above €400,000 of the taxable salary), the discretionary margin remains unchanged at 1.18%. The substantial first tier increase in the discretionary margin gives employers greater options for designing human resource benefits that address the needs of employees and corporate environmental policies.

Has your company updated its human resource policies to take advantage of the new allowance limits? As your partner in modern mobility solutions, XXImo offers a flexible mobility platform that accommodates your employees’ travel preferences and allows you to monitor and control your mobility budget.

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