With tax-free benefits you use the free allowance of the Dutch work-related costs scheme (WKR). Employees buy benefits from a gross source, such as gross salary or holiday allowance, without paying income tax on it.
How it works
- The employee chooses a benefit and a budget source in the app, and digitally signs an addendum for the gross salary deduction.
- Each purchase becomes a transaction in the portal: a gross deduction from the source and an allocation to the free allowance.
- We invoice you monthly for all purchases.
What it brings
- Employees save up to 49.5% income tax, depending on their salary and bracket.
- You pay less in employer costs, potentially around 18% of purchases.
- Note: a lower gross salary can affect holiday allowance, pension accrual and other salary components.
Setting budgets
- One-off budget: for one-off benefits only.
- Monthly budget: for one-off and monthly benefits.
Choosing Between One-Off and Monthly Budgets
Consider these factors
- Control: Monthly budgets allow better tracking of WKR space usage.
- Flexibility: Employees can use monthly budgets to pay for subscriptions on a monthly basis instead of upfront, allowing spreading of costs.
- Engagement: Larger one-off budgets may encourage higher initial engagement on the Epassi Platform.
Category specific budgets
Within Epassi you can optionally provide employees with multiple budgets. For example, a budget that can be spent on benefits from all categories and in addition a budget tied to a specific benefit category, for example: 'Health' or 'Mobility'. This means this budget can only be used for benefits within that specific category.
2. Setting Tax-Free Limits
In addition to the Tax-Free budget which is granted to the employee, you can control the spending within the WKR by setting different limits. Please note that these limits are optional in addition to assigning employee budgets, they are not mandatory:
- Company Limit: This is a yearly limit which is set on a Company level. It is the sum of all Tax-Free benefits purchased per year by employees. It is possible that the sum of budgets assigned to employees is higher than the Company Limit. In this case, a 'first come, first served' principle applies. This means that as soon as the Company Limit is reached, employees cannot purchase benefits anymore from their budget, as the purchase will be blocked within the Epassi platform.
- Company Group Limit: It is possible to assign employees to a Company Group. A limit can be set per Company Group, which functions the same way as the previously described Company Limit.
- Budget Limit: If multiple budgets are provided to an employee, a limit per budget can be set. Also, here it is possible that the sum of budgets assigned to employees is higher than the Company Limit.
The limits described above can be used in combination with each other as well. As soon as any of the limits is reached, a purchase made by en employee will be blocked.
3. Budget Sources
The employer decides which budget sources are made available. Common sources for the salary exchange are Gross salary or Gross holiday allowance.
Ensure that employee salary cannot fall below minimum wage ( WML - Wet Minimum Loon ) as a consequence of the salary exchange.
4. Tax-Free addendum
For every Tax-Free purchase, an employee has to digitally sign a contract addendum, to formally agree to the gross salary deduction. Epassi has a template addendum which you can use for this purpose, it is also possible to use a custom template. After each purpose, the employee will receive a PDF copy of the addendum via email. The addendum is also made available to you for download via the Manager Portal (https://portal.epassi.nl/admin/tax-free-benefits/transactions) .
Processing Tax-Free transactions
The Tax-Free section of the Manager Portal (https://portal.epassi.nl/admin/tax-free-benefits/transactions) provides a real time overview of the benefit purchases made by employees. Each benefit purchase and refund is listed as a transaction.
As mentioned, each transaction results in a mutation which needs to be processed on the salary slip of the employee, as the transaction amount results in a gross deduction from the budget source (e.g. gross salary). In addition, the transaction amount needs to be allocated in the free space of the WKR.
IWhen the transactions concerns an expense claim for which the employee has paid the amount in advance themselves, this must be processed as a net payment of this amount and a gross deduction of the same amount.
Refunds
For multiple reasons, it can happen that a previously purchased benefit is refunded, either fully or partially. In this case, a transaction appears in the reporting with a positive transaction amount, as this amount flows back to the employee via the salary slip.
Exporting Transactions
In the Tax Free Transactions section (https://portal.epassi.nl/admin/tax-free-benefits/transactions) of the Manager Portal, you can export the transactions to either a CSV or Excel file. You can use the date picker to determine for which period you would like to export these transactions. You can download an example export here: Tax-Free transactions export (download)
This table contains a detailed explanation of the different fields provided in the export
| Header | Example value | Description |
|---|---|---|
| user_id | 13 | A unique Epassi user ID. |
| transaction_date | 2025-01-01 | The date of the benefit purchase. |
| full_name | Tony Stark | Full name of the employee. |
| user_status | Active | Epassi status of the employee, either active or inactive. |
| tony@alleo.nl | Employee email address. | |
| source | Your Budget | Budget source name from which the benefit purchase was made. |
| value | -15 | The benefit purchase amount. This is a minus amount, unless the transaction is a refund. |
| benefit_name | Meditation Moments | The name of the benefit purchased. |
| benefit_type | One off | The type of benefit, this can be: One off Monthly Full Refund Partial refund |
| alleo_custom_debtor_id | 3 | Example custom field |
| alleo_custom_payroll_id | 12345 | Example custom field |