As was announced on Prinsjesdag last year, as of January 1, 2022, the Dutch government has introduced a new work from home allowance to cover the additional costs incurred by employees who are working from home - specifically as a result of the coronavirus pandemic.
But what is the new work from home allowance, and what could it mean for you?
Since the outbreak of COVID-19 in spring 2020, more and more people with jobs in the Netherlands have warmed to the idea of switching to a hybrid working style, where they split their work week between the office and their home.
The ongoing pandemic and government advice to work from home as much as possible means millions of people continue to work (predominantly) from home - and while this does have certain benefits (less time spent commuting to and from work, for example), there are certain disadvantages.
Namely, employees have noted an increase in their shopping and utility bills, as they spend more time at home and consequently spend more money on household items such as toilet paper and coffee, and use more gas or electricity to warm their homes.
In order to compensate for these costs, last September the government announced the new tax-free work from home allowance (thuiswerkvergoeding), which came into effect on January 1, 2022.
Under Dutch law, employers can now provide their workers with a tax-free allowance of up to two euros per day.
So long as you and your employer set an agreement for how many days a week you’ll be working from home (for instance in your work contract), you qualify for the new work from home allowance.
However, it is important to note that if you split your time between the office and your home, you won’t be eligible to receive the home allowance and the travel allowance simultaneously - your employer can decide which allowance they grant you on each day.
Calculations carried out by the National Institute for Family Finance Information (Nibud) found that just two euros a day cover the average extra costs incurred by working from home.
While this should help many cover the costs of higher bills, experts have noted that two euros is certainly on the low side as we head into 2022 - especially considering the rising rate of inflation and the current energy crisis.
Your employer has no legal obligation to provide workers with this new allowance. However, the collective labour agreement for your sector could contain rules about the compensation offered for working from home.
You can discuss working arrangements with your employees, and establish an agreement regarding how many days a week each employee will spend working from home versus in the office. On the basis of these agreements, you as the employer can set a fixed compensation rate for each of your employees - this fee does not have to be adjusted to account for any unplanned deviations from the agreement (for example if an employee is required to spend an extra day working from home).
You will provide your workers with their allowance directly, and will not be reimbursed by the tax authorities for the costs - but will not be required to pay payroll tax for this allowance. You could choose to provide workers with more than just two euros a day, but if you do this you will have to pay taxes on the value above two euros. You can state how much your company has spent on this compensation in the payroll tax return.
As an entrepreneur, you will have to keep track of the agreements you’ve made with your employees - specifically which on which days employees receive the travel allowance and on which days they receive the work from home allowance.
In addition to the new home working allowance, there is another scheme that allows companies to reimburse their employees for the costs of setting up their home office. This could, for example, (help to) cover the costs of an office chair or desk - compensation for these purchases is also tax-free.