Many employers are willing to pay the total study costs of their employees. They see this as an investment in the quality of their employees and organisation, and sometimes also as a way to retain employees in a tight labour market.

In some cases, the costs are shared, for example 75%-25% or 50%-50%. Training budgets are often available for this purpose, sometimes at departmental level and sometimes at central level within the organisation. Ask your employer about this. Commercial organisations can then deduct the Executive MBA programme costs from their taxable profits, which, in many cases, results in a considerable tax benefit of up to 25%.

If your employer is not willing to contribute financially to an Executive MBA programme, there is another option. With your employer’s cooperation, it is possible to offset part of the study costs against tax. An employer can pay study costs and deduct this investment of your Executive MBA (in part or in full) from your gross salary. This reduces your taxable income, meaning you pay less income tax. You pay the programme costs yourself, but from your gross salary rather than your net salary.

This is cost-neutral for the employer, while your benefit can amount to almost 50% of the Executive MBA costs, depending on the tax rate that applies to you. Together with your employer, you can have a supplement added to your employment contract stipulating that you may exchange part of your gross salary for the financing of a study. Under certain conditions, you can also exchange your holiday allowance, entitlement to paid holidays, bonuses, overtime allowances and a thirteenth month’s salary for your regular salary.

Example 1

An Online MBA participant with an income in which a substantial portion falls under the 49.5% tax rate wants to pursue a course of study that costs €14,750 per year. By exchanging gross salary for study costs, this course costs €7,301.25 per year instead of €7,448.75 net per year. This represents a net saving of €7,301.15 per year, while costing your employer nothing and possibly even yielding a financial benefit*.

Example 2

An On-Campus MBA participant with an income in which a substantial portion falls under the 49.5% tax rate wants to pursue a course of study that costs €17,250 per year. By exchanging gross salary for study costs, this course will cost €8,538.75 per year instead of €8,711.25 net per year. This represents a net saving of €8,538.75 per year, while costing your employer nothing and possibly even yielding a financial benefit*.

PLEASE NOTE:

• Since 2022, study costs are no longer deductible for the participant’s income tax; your employer may still reimburse you for these costs tax-free.
• A salary reduction has an impact on many other income-related schemes: for example, a lower salary may result in a lower mortgage interest deduction. It also means that the sale of leave hours will yield less. In addition, your salary can, of course, never be reduced below the minimum wage.
• This temporary reduction in gross salary may result in lower benefits in the event of unemployment or incapacity for work.
• In certain cases, less pension may be accrued during that period.
• Upon termination of employment, your employer may require you to repay part of the study costs that have not yet been deducted from your monthly gross salary, which means that the tax benefit for that part of the study costs will be lost if your new employer does not wish to cover those costs.

For further information, please contact the human resources/finance department of your organisation and also see the website of the Dutch tax authorities Belastingdienst.

*Under the working expenses scheme, the costs reimbursed by the employer for a specific course of study are exempt. This means that this benefit or reimbursement remains untaxed. Due to the temporary reduction in gross salary, the employer may owe less social security and pension contributions (depending on the amount of the gross salary).

No rights can be derived from this information.