Most countries that allow tax-free employee gifts set a flat euro threshold per gift, or per employee per year. The Netherlands works differently. Instead of a gift-specific cap, Dutch employers get a "vrije ruimte" (free space), a tax-free budget calculated as a percentage of their total payroll, that covers gifts alongside a huge range of other work-related costs. This article explains how the werkkostenregeling (WKR) actually works, what happens if you go over the free space, and 12 gift ideas that fit comfortably within it.
How the werkkostenregeling (WKR) works
Under the werkkostenregeling, every employer gets a "vrije ruimte": a tax-free budget calculated as a percentage of the company's total taxable wage bill (the "fiscale loon"). The percentage is tiered:
- A higher rate applies to the first €400,000 of total wage bill, roughly 1.92% in recent years.
- A lower rate applies to everything above €400,000, roughly 1.18% in recent years.
These exact percentages are set annually as part of the government's tax plan, so they fluctuate slightly year to year. Always confirm the current-year rates with your accountant or payroll provider before relying on them.
What makes the vrije ruimte different from a typical gift allowance is scope: it isn't reserved for gifts. Employers can use it for any work-related benefits, Christmas gifts, staff parties, bicycles, gym memberships, and much more, all pulling from the same shared budget. Within that budget, there's no gift-specific cap. A single gift could, in theory, use up a large chunk of the free space if the employer chooses to spend it that way, there's no per-gift ceiling the way there is in most other countries.
Cash gifts can also be included within the vrije ruimte, as long as the employer formally designates them as work-related costs. That's another point of contrast with most other countries, where tax-free treatment is usually reserved for in-kind (non-cash) benefits only.
What happens if you exceed the free space?
If an employer's total spending on work-related benefits, gifts included, exceeds the vrije ruimte in a given year, the excess isn't added to the employee's taxable income. Instead, the employer pays a flat 80% final levy ("eindheffing") on the amount over the free space.
This is one of the most important differences between the Dutch system and most other countries' employee gift rules: the employee is never personally taxed on the excess. Only the employer carries the cost, and it's paid directly to the tax authorities as a final levy, not processed through the employee's payroll or personal tax return.
In practice, this means Dutch employers have more flexibility than a rigid per-gift threshold would suggest, but also more responsibility to track cumulative spending across the whole year, not just per gift or per employee, since the free space is a single company-wide pool.
12 gift ideas
1. Hoodie – The Rex: the flagship piece
A heavyweight hoodie employees actually wear, popular enough to comfortably justify its share of the vrije ruimte on its own.
- Material: 90% organic cotton, 10% polyester.
- Branding: embroidery, print, or patches.
- Order: MOQ 100 · from €40.09/unit.
2. Sports Socks: the safe favourite
Sunday's most-ordered item, a small, low-cost gift that still lands well, useful if you're keeping day-to-day spending modest.
- Material: 80% cotton, 17% polyamide, 3% elastane.
- Branding: knitted-in logo zones.
- Order: MOQ 100 · from €4.00/unit.
3. A5 Notebook: FSC-certified paper
A practical hardcover notebook with a traceable material story, an easy, low-cost pull on the free space.
- Material: FSC-certified paper, PU cover.
- Branding: debossing or print on the cover.
- Order: MOQ 100 · from €4.58/unit.
4. Premium Tote Bag: the lightweight carry
A heavyweight cotton tote with a premium feel, everyday enough to actually get used at the office or the supermarket.
- Material: 270gsm cotton.
- Branding: print or custom straps.
- Order: MOQ 100 · from €6.44/unit.
5. Recycled Steel Bottle: everyday hydration
Vacuum insulation in recycled stainless steel, a gift that gets used and seen every day on someone's desk.
- Material: recycled stainless steel.
- Branding: laser engraving or print.
- Order: MOQ 50 · from €11.00/unit.
View the Recycled Steel Bottle →
6. Baseball Cap: the everyday accessory
An affordable, highly visible accessory that works all year round and rarely sits unused in a drawer.
- Material: 100% cotton.
- Branding: embroidery.
- Order: MOQ 100 · from €8.34/unit.
7. Knitted Scarf: the cosy extra
A high perceived-value item for a Dutch winter, a warm gesture that still stays well inside a typical vrije ruimte.
- Material: 80% viscose, 20% polyester.
- Branding: woven label.
- Order: MOQ 100 · from €7.66/unit.
8. Bamboo Tea Bottle: the natural choice
A bamboo exterior over a durable stainless steel interior, a warmer-toned alternative to an all-metal bottle.
- Material: stainless steel, bamboo.
- Branding: laser engraving or print.
- Order: MOQ 50 · from €18.70/unit.
9. RollTop Backpack: the everyday bag
A water-resistant backpack with a laptop compartment that quickly becomes someone's everyday commuting bag.
- Material: GRS-certified recycled PU, water-resistant.
- Branding: print or embroidery.
- Order: MOQ 25 · from €24.57/unit.
10. Noise-Cancelling Headphones: the premium pick
A higher-end gift, still a small line item against a payroll-based free space rather than a rigid per-gift cap.
- Material: recycled ABS, ANC + ENC, foldable.
- Branding: digital print or doming.
- Order: MOQ 50 · from €24.46/unit.
11. Espresso Mug: for the coffee obsessives
A proper espresso cup adds a bit of personality to a gifting bundle without meaningfully denting the vrije ruimte.
- Material: ceramic.
- Branding: debossed or printed logo.
- Order: MOQ 108 · from €8.44/unit.
12. Wireless Powerbank: useful everyday tech
A magnetic wireless powerbank in recycled ABS plastic, genuinely useful for any commute or business trip.
- Material: recycled ABS plastic.
- Branding: pad print or digital print.
- Order: MOQ 50 · from €18.39/unit.
Want the full Dutch-language breakdown?
For the full detailed breakdown (in Dutch), read Belastingvrije personeelscadeaus in Nederland.
Common mistakes
- Assuming there's a flat per-gift cap, like in Germany. The Netherlands has no fixed euro ceiling per gift. What matters is the company's total vrije ruimte, a payroll-based budget shared across all work-related benefits.
- Forgetting the free space covers everything, not just gifts. Staff parties, bicycles, and other work-related costs all draw from the same vrije ruimte, so it can run out faster than employers expect if gifts aren't planned alongside everything else.
- Assuming employees get taxed on the excess. If total spending exceeds the free space, the employee isn't taxed at all. The employer pays an 80% eindheffing on the excess amount instead.
Note: this article is a general explainer, not tax advice. Percentages and rules can change annually — confirm how they apply to your business with your accountant or payroll provider.
Order gifts for your team
Every product above is fully customisable with your branding and available in business order quantities. Browse the full range in the Sunday catalogue to put together a gift that fits your company's vrije ruimte.
