The Net DGA Bonus: Tax-Free WKR Reimbursement

As a director-major shareholder (DGA) of a private limited company (BV), you can grant yourself a reimbursement that falls within the tax-free allowance (vrije ruimte) of the Work-Related Costs Scheme (WKR). If you're the sole employee of your (holding) BV, calculating the allowance for 2024 is straightforward:

• 1.92% of the fiscal wage up to €400,000, and

• 1.18% of the amount exceeding €400,000.

This allowance can be used for tax-free reimbursements, provisions, and/or benefits provided.

Important: Bonus Must Be Customary

The bonus must be customary. This depends on factors such as the amount of the bonus, its commonality within the company, and whether colleagues in the industry offer similar bonuses. The Tax Authorities consider an amount of up to €2,400 per year per DGA as customary.

Exceeding the Allowance: 80% Final Levy or Special Payroll Tax Rate

If you exceed the available allowance, you must pay an 80% final levy on the excess amount. While this rate is high, it can still be advantageous in certain situations.

Alternatively, the excess bonus may be taxed at a special payroll tax rate (bijzonder tarief). This rate is designed to prevent excessive withholding on one-time earnings, such as holiday pay, bonuses, severance payments, or death benefits. These irregular earnings often do not occur annually. Special bonuses are often taxed at a higher rate than regular wages because they are considered additional income and may quickly fall into a higher tax bracket. The exact tax rate applicable to a special bonus varies per situation. For example, a bonus or year-end payment is often subject to a tax rate of 51.75%, meaning more than half of the special bonus is paid in taxes and premiums.

Example Calculation

Suppose your salary in 2024 is €100,000, and you wish to receive a net bonus of €2,424. Here's a comparison between paying the amount as gross wages or as a WKR reimbursement.

1. Gross as Wages

• To net €2,424, the gross amount must be €4,800.00.

• The top portion of the DGA's salary is taxed at the maximum rate in box 1 of 49.5%. The payroll tax would then be €2,376.00 (49.5% x €4,800.00).

• The net reimbursement is €2,424, and the total employer costs are €4,800.00.

2. Bonus as WKR Reimbursement

• The tax-free allowance on a salary of €100,000 is €1,920 (1.92% x €100,000).

• The DGA receives a net bonus of €2,424.

• You exceed the allowance by €504 (€2,424 - €1,920).

• Over this amount, you pay an 80% final levy: €403.20.

• The total cost for the BV is €2,424 + €403.20 = €2,827.20.

Advantage: You save €1,972.80 by utilizing the WKR, making it more advantageous than paying the bonus as wages.

Consider Previous Reimbursements

Have you already provided tax-free reimbursements in 2024, such as a holiday package or staff outing? Then the tax-free allowance is reduced. Keep this in mind if you plan to distribute a bonus.

Tip

Beyond the tax-free allowance, there are other ways to receive tax-free reimbursements within a BV:

• Business kilometers: You can be reimbursed €0.23 per kilometer, including commuting.

• Home office allowance: You may reimburse €2.35 per day tax-free in 2024.

• Internet costs: If it's 'necessary' for work that you have internet at home, you can have this reimbursed tax-free. Don't forget to submit the invoice to the BV.

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