The Netherlands' Home Working Allowance In 2023

Home working practices are well established in the Netherlands. In fact, close to 20% of Dutch employees regularly worked from home before the COVID-19 crisis and a member survey of the Dutch Employer’s Organisation AWVN shows that many are convinced that home working will continue long after COVID.

As an employer, it is important to ensure that your employees can work as productively and comfortably from home as in the office. Today, employers in the Netherlands can already provide their workers with a tax-free allowance to set up their home office space thanks to the 'vrije ruimte' in the Werkkostenregeling.

As of 2022, a separate home working allowance can be added to cover the additional daily cost of working from home. This home working allowance is of € 2.15 per day in 2023. But what does this mean for your administration, your expense policy and your employees? Read on to learn all about the home working allowance in the Netherlands.

The benefits of working from home

Home working is here to stay, for multiple reasons. Over the duration of the pandemic, employers and employees have both noted that working from home hasn’t led to major disturbances in productivity and, on the contrary, comes with a number of benefits. The benefits of working from home include:

• Fewer car trips, a net benefit to the environment
• Less time wasted in commuter traffic
• The ability to balance private matters with work while at home
• More efficient meetings
• Fewer distractions, meaning more room for deep work.

Of course, not everything is perfect when working from home. For example, “fewer distractions” only applies to people without parallel family commitments or with the means to afford independent childcare.

Besides, work is also a social activity, the importance of which cannot be underestimated. In a fully remote context, brainstorming over a coffee or getting a quick consult in the hallway becomes virtually (pun not intended!) impossible.

Which is why it’s important for businesses that rely on these informal meetings to include time and space for interaction to happen online. This can be through short daily meetings or longer weekly Zoom calls, anything that can help maintain a certain group dynamic.

It is likely that office work will continue to evolve towards a hybrid setup combining the best of both worlds. Regardless, home working is now permanently a part of the equation.

What does the home working allowance entail?

Working from home does mean additional expenses for your employees. Things like a higher electrical or utility bill, extra bandwidth to accommodate multiple Zoom calls in parallel, or even just coffee beans and garbage bags. All items that would normally be covered by their employer if they were spending their days in the office. Which is why the Cabinet decided on a specific home working allowance for 2022.

This home working allowance took effect on January 1st, 2022. It allows employers to provide a maximum of € 2.15 per day and per employee as tax-free compensation for the additional costs related to home working. While it may not seem much, this allowance does add up to close to 500 euros per year for full-time employees.

With this allowance, employers can reimburse these costs without having to deduct payroll taxes or make additional social security contributions.

Travel allowance and home working allowance?

An important rule to include in your expense policy is that you cannot grant employees both a travel allowance and a home working allowance for the same day. This makes sense: if an employee is working from home for the day and being compensated for it, he or she cannot simultaneously claim an allowance for commuting that day.

Is the home working allowance compulsory?

No, employers can decide for themselves whether or not to grant their employees a home working allowance. However, as an employer it is a relatively low cost way of keeping your workers satisfied and giving them a little extra. Whatever you decide to do, be transparent and include your decision in your expense policy. Your employees will appreciate it.

What about the administrative processing?

Broadly speaking, there are two ways to pay this allowance.

1. You can sum up the allowance for the number of days in each pay period and pay it out monthly.
2. Or you can give employees a fixed allowance per month based on the average number of days they work from home.

While you could keep track of your employees' home working days in an Excel sheet, it’s much easier to use an automated solution like Mobilexpense. Mobilexpense is a digital expense app that covers all the regulatory requirements of the Dutch market. Our experts are ready to help you implement the home working allowance in your solution.