Expense reimbursement under Dutch employment law
Employees in the Netherlands are entitled to reimbursement of expenses they incur in the performance of their duties. The legal basis lies in the employer's general duty of good employer practices under Article 7:611 of the Dutch Civil Code and, in practice, the employment contract, company policy, or applicable collective labour agreement. Under Article 7:618 of the Dutch Civil Code, money paid purely to cover expenses is not regarded as remuneration; however, any surplus above actual cost is treated as wages and subject to wage tax and social security contributions. Common reimbursable expenses include travel costs, meals during business travel, home office equipment, and professional training.
From a tax perspective, the work-related costs scheme (werkkostenregeling, WKR) governs which expense reimbursements and benefits in kind the employer can provide tax-free. Under the WKR, the employer has a free allowance (vrije ruimte) of 1.92% over the first €400,000 of the total wage bill, plus 1.18% over the excess. Reimbursements within this budget are not subject to wage tax.
Common types of expense reimbursement in the Netherlands
The most common tax-free reimbursements under the WKR include: a commuting allowance of up to €0.23 per kilometre (2024 rate), a home office allowance of €2.35 per day, meals during business travel, and study costs for work-related training. The employer may also provide tax-free equipment such as a laptop, mobile phone, or office furniture if the employee needs it for work.
Reimbursements that exceed the tax-free limits or fall outside the designated categories must either be charged to the free allowance or taxed as wage income at a flat rate of 80% (eindheffing). Proper documentation and a clear expense policy are essential for compliance.
Disputes over expense reimbursement under Dutch law
Where an employer refuses to reimburse legitimate work-related expenses, the employee can claim the costs through the subdistrict court. If the expense obligation is established in a CAO or company policy, the claim is straightforward. In other cases, the employee may invoke the duty of good employer practices under Article 7:611 of the Dutch Civil Code. Expense reimbursement claims are subject to the five-year limitation period under Article 3:308 of the Dutch Civil Code. Employers who fail to reimburse genuine business costs risk having these amounts reclassified as hidden wages, triggering additional tax, social security and wage-increase liability.