No tax-free allowance for each day working from home

An employer can provide a tax-free reimbursement for the additional expenses incurred by an employee while working from home. Under the specific exemption in the Dutch Work-Related Cost Scheme (Werkkostenregeling), employers can provide their employees with a tax-free allowance for working from home of €2.15 per day (amount for 2023). However, this working from home allowance received by the employee may not always precisely match the tax-exempted amount multiplied by the number of working from home days in a year.

For example, it is not allowed to apply both the specific exemption for working from home and the exemption for commuting expenses for the same workday. Usually, only a commuting allowance is provided for such a mixed workday.

Additionally, the so-called 128-day rule should also be taken into account. This rule states that if an employee works from home for five days a week and works remotely for at least 128 days in a calendar year, the employer can provide a tax-free working from home allowance as if the employee worked remotely for 214 days per year. This allows the employer to avoid immediate required adjustments of the fixed allowance in case of deviations due to illness or leave. However, this also means that the exact number of working from home days may will not always be reimbursed. It is important to apply the allowances proportionally if an employee regularly works fewer than five days a week from home.

More from the HBK Update June 2023

• New (temporary) legislation regarding box 3
• Holding on to definitive assessments and objections with income in box 3
• Restructuring box 3 assets before October 1st (valuation date arbitrage)
• Excessively lending act
• Limitations/Abolition of Business Succession Facilities
• Tax authorities will start checking for pseudo self-employment from 2025
• Convert loss from substantial interest into tax credit
• No tax-free allowance for each day working from home
• Repaying Deferred Tax Payments
• MIA and Vamil
• Reimbursement of costs for assistance with filing income tax return for foreign employees
• Co-operating spouses: Co-operating remuneration or co-operating tax deduction?