Charly Cares offers several ways for a company to purchase babysitting credit for an employee. This can be done by ordering a one-off or periodic fixed contribution per employee, or through a prepaid provision (paid in advance) from which the employee's (business) babysitting services are paid. Below, we explain the tax consequences of such arrangements.
Charly Cares offers those searching for babysitters and providers of babysitting services (Angels) the opportunity to get in touch with each other through the Charly Cares platform, thereby connecting supply and demand. Since Charly Cares is purely a platform and the services provided by the angels to parents fall under the home services scheme ("dienstverlening aan huis"), no wage tax needs to be deducted from the compensation paid by the parents to the angels.
If an employers pays for the costs incurred by the employee for the Charly Cares services as well for the Angel, it is not possible for the employer and the Angel to enter into an agreement. If this were to happen, there would be an employment relationship between the Angel and the employer in question.
In order to stay within current guidelines and regulations, this can instead be done by reimbursing the costs incurred by the employee. This means that the employee pays for the costs of the babysitting services and the use of the platform themselves and that the employer (partially) reimburses these costs. An employer can reimburse costs incurred by the employee tax-free to a certain extent. The costs that are reimbursed by the employer for the employee fall, if they do not fall under the zero valuation ("nihilwaardering"), within the discretionary scope of the WKR (work-related costs scheme).
The discretionary scope of the WKR is 3% over the first € 400.000 of wage costs and 1,2% over everything above this € 400.000. These percentages give a discretionary scope of € 19.200 for wage costs of 1 million and € 37.200 for wage costs of 2,5 million. The discretionary scope is the amount that an employer can freely reward their employees on an annual basis. It is important to know that, for example, the costs of staff parties already consumes part of the discretionary scope; it is generally held that the percentages do not lead to a very generous arrangement.
If an employer reimburses more than the available scope on an annual basis, there will be a so-called final levy ("eindheffing"). This means that a fixed percentage of tax must be paid over the excess. This percentage has been set at 80%.
Suppose that we again consider an employer with wage costs of 1 million. For the costs of Charly Cares and the Angels, they have reimbursed the costs of € 17.500 within the discretionary scope. For a number of employees, a total of € 10.000 in costs are reimbursed for Charly Cares and Angels. The calculation in this case is as follows:
- Discretionary scope 19.200
- Total reimbursed costs 17.500 + 10.000 = 27.500
- Amount to be taxed with final levy: 27.500 -/- 19.200 = 8.300
- Final levy to be paid: 8.300 * 80% = 6.640
- In this specific case, for the employer, reimbursing the costs of CC costs 10.000 + 6.640 = 16.640
For the employer, this € 16.640 is to be taken as costs. As shown above, the exact costs for the employer depend on how much of the discretionary scope is still available to the employer.to top