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    St. Nicholas is coming to town: who will pay?

    The coronavirus protocols and measures will throw a spanner in the works of the traditional St. Nicholas celebrations in the Netherlands. Yet, maybe you see a way to organize a St. Nicholas party for the children of your employees. It is then important to know which tax rules apply to the expenses on such a party. For instance, different rules apply to expenses on consumptions and gifts. And the location where the celebration is organized is also pivotal.

    If your organization plans to organize a St. Nicholas party for your employees and their children, you will need to stock up on candy and buy presents for the children. Maybe a visit by St. Nicholas and a few of his helpers is also an exciting and fun experience for everyone.


    In the administrative processing, you must distinguish between expenses on:

    • the party (such as decorations and the visit by St. Nicholas and helpers);
    • consumptions (such as small bites like ‘pepernoten’ and drinks during the celebration, but not full meals);
    • the presents for the children.

    The exact administrative processing of these expenses depends on whether the party is held at the office or an external location.


    Perhaps the office is large enough to organize a corona-proof party. In that case, the consumptions for the employees, their partner and their children are exempt from tax without having to be charged to the ‘vrije ruimte’ (the scope of tax-free aggregated personnel costs). The same applies to employees working at other establishments, locations or offices. Any other expenses on a party held at the office will also be exempt from tax without having to be charged to the ‘vrije ruimte’. However, if the party is held at an external location, the expenses on consumptions and other party-related facilities must be added to the employees’ taxable wages. Yet, it is also possible to charge these expenses to the ‘vrije ruimte’. There are two exception in which case an external location may be treated as the office for tax purposes:

    • The external location is another establishment, location or office part of your organization.
    • You agree to use the ‘concernregeling’ (Concern Regulation) in the Work-related Expense Scheme with another employer and the St. Nicholas party is held at an establishment, location or office belonging to one of your organizations.


    If you prefer not to organize a St. Nicholas party due to the coronavirus pandemic, it is possible to send your employees, their partners and their children a small gift or some candy. This counts as wages in-kind, which means the expenses on the gift or candy must be added to the employee’s taxable wages. However, as a good-natured employer you can also decide to charge it to the ‘vrij ruimte’. Most employers will choose the second option. After all, if the expenses on the gift or candy are added to an employee’s  taxable wages, these expenses will appear (partly) on the employee’s pay slip: you may as well leave the price tag on then.


    Expenses on gifts for on-call workers and freelancers cannot be charged to the ‘vrije ruimte’. The Work-related Expense Scheme, which the ‘vrije ruimte’ is part of, only applies to those employee on your organization’s payroll. You can still file the expenses on the gifts as wages subject to a final levy, called ‘eindheffingsloon’ in Dutch, if those gifts are also given to employees under the same circumstances. You must then inform the on-call workers and freelancers of this.


    St. Nicholas celebrations during the pandemic

    Celebrating St. Nicholas safely during the coronavirus pandemic isn’t easy. This does not mean, however, that celebrations are not at all possible. Here are a few ideas:

    • Organize a video call between St. Nicholas and the employee and his family at home. Candy and presents can be sent to the employee’s house.
    • Nicholas and his helpers pay a visit to the office, but the employees and their children are divided in multiple groups. The partners can stay at home if necessary.
    • Nicholas will send a happy video chat to all employees and their children from his castle (according to the story, his workplace when he is in the Netherlands). Candy and presents can be sent to the employee’s house.

    We advise to refrain from putting a lot of effort in a large-scale party in person. The current coronavirus protocols and measures will most likely not permit this.

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