An employee receives a traffic fine during working hours. As an employer, you decide to cover the cost. A generous gesture, but beware: not every reimbursement can be handled through the Work-Related Costs Scheme (WKR). In fact, in most cases, it is not allowed for tax purposes.
what exactly are the rules?
The Dutch tax authorities mainly consider who received the fine and whether you can recover the amount from the employee. Based on this, they determine if the payment counts as taxable income (wages), and whether it can be included in the WKR’s free allowance.
fine imposed on employee → paid by employer
➡️ Always taxable income
If the fine is issued to the employee and you pay it, it is always considered taxable income. You cannot include this payment in the WKR free allowance. It doesn’t matter whether the fine was incurred during working hours or while acting on behalf of the employer.
fine imposed on employer (e.g., company car)
Can the fine be recovered from the employee?
➡️ If you do not actually recover the fine from the employee, it is still taxable income and cannot be covered under the WKR free allowance.
Cannot be recovered from the employee (for example, if the employee was asked to hurry)
➡️ Then it is not taxable income. In that case, you may designate the cost as final levy wage within the WKR free allowance.
employer pays tax on recoverable fines
The tax authorities allow employers to pay the tax on a recoverable fine themselves. However, note: this payment is still taxable income, so it does not qualify for the WKR free allowance.
summary table
Situation | Taxable income? | WKR free allowance allowed? |
|---|---|---|
Fine issued to employee, employer pays | Yes | No |
Fine issued to employer, recoverable from employee | Yes | No |
Fine issued to employer, not recoverable | No | Yes (within free allowance) |
do you know the fiscal limits of the WKR?
What starts as a generous decision can end in unexpected wage tax and additional assessments. Make sure you carefully check what you reimburse, to whom, and how you record it. This way, you avoid paying far more as an employer than just the fine itself.