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STUDY COSTS REIMBURSED FOR CHILDREN OF EMPLOYEES

Are you DGA and do you have children who are studying? In that case, this message is especially important under point 1, because you can then benefit from your B.V. the study of your children can be reimbursed. Please contact us if you wish to do this.

Source: Belastingdienst.nl

As an employer you can reimburse the study costs of children of employees living in the Netherlands. This can be done in 3 ways.

1. You give your employee’s child an independent study allowance.

Because you give the study grant to the child yourself, the study grant is income of the child. You must deduct wage tax / national insurance contributions from this income in the usual manner according to the green table. The child is not insured for employee insurance. You cannot designate this income as a final levy wage. No specific exemption is possible.

Is the child’s study grant not higher than € 6,759? And does the student have the payroll tax credit applied to you? Then you do not have to withhold wage tax / national insurance contributions.

Whether or not employers’ levy Health Insurance Act

Do you give the child a periodic study allowance? In that case you must pay the employer’s levy on the Healthcare Insurance Act (Zvw). This is not necessary with a one-off study grant.

Example

You give a child of an employee an independent right to a study allowance. In August you pay the child € 3,000 once. Because there is no wage period, you do not pay an employer’s Zvw levy on wages in August.

2. You give the student grant to your employee and designate it as a final levy wage within the free space of the work-related costs scheme.

Do you want to designate the study grant as a final levy wage? Which can. If the allowance is not more than usual. This is the so-called customary test (see section 4.2 of the ‘Payroll Tax Handbook’). No specific exemption is possible.

Example

You give employees with studying children a reimbursement of € 3,000 per year for tuition fees and additional study costs. You may designate this allowance for study costs as a final levy wage. Because a reimbursement of € 3,000 for study costs is not uncommon.

3. You give the study grant through a study fund.

If you meet the conditions, benefits and benefits in kind from a study fund for the children of employees are not part of the salary.

There are 3 conditions for such a fund:

It does not include benefits and benefits in kind for adoption and death, for illness, disability and childbirth.

The employee does not have an exempt entitlement to benefits or provisions.

Employees who contribute to the fund have jointly contributed at least as much as the employer in the past 5 years. If the fund has been in existence for less than 5 years, use the period from the foundation of the fund up to the year in which the payment or provision takes place.

Contributions of the employee to the fund are deducted from the net salary. These contributions are therefore not deductible.

Example

You have a study fund that meets the conditions. The fund reimburses the study costs of the child of 1 of your employees. The allowance is not the wages of the employee nor of the child. You can always call contact us for more information