The mobility budget is the possibility offered by an employer to its employees to exchange the company car or the entitlement to a company car for a budget. The employee can spend the mobility budget as he wishes in 3 pillars, taking into account the offer made by the employer in those pillars.
Commuting allowance – for whom?
When you hire an employee in Belgium there is a big chance that you need to reimburse his commuting from and to the office. This is always the case when he travels with public transportation or by bike and sometimes when he comes to work with his own car. The amount of the mandatory reimbursement (mobility budget) is determined by the Joint Industrial Committee to which your company belongs or in the National Labour Council if nothing has been decided in your Joint industrial Committee.
Another way to commute is with a company car, which is granted to quite some employees in Belgium. Although the main reason for granting a company car will be the professional use, in practice most employees can use the company car for private purposes. This is an attractive benefit because the employee is only taxed on a benefit in kind for this private use. Even the fuel costs are included in this benefit in kind.
However, we notice that young employees in particular are not always interested in a company car and that the government is taking steps to discourage the tax benefit of the company car.
This could be the time to introduce the mobility budget in your company.
Mobility budget for all employers?
No, as an employer you can only opt for this budget when you have offered company cars without interruption for at least 36 months preceding the budget. The minimum term of 36 months does not apply if the employee is employed by a starting company.
And the employees?
If the employee has a company car at his disposal or is entitled to one according to the car policy, he is eligible for the mobility budget.
How about the budget?
Introducing the mobility budget should not result in additional costs for the employer.
The available budget for the employee corresponds to the actual yearly employer cost of the company car that is being exchanged. This is not only the gross yearly cost of the exchanged company car or the company car to which the employee is entitled but also contains the tax and the social security charges, the fuel cost, the solidarity contribution for the social security, insurances, …, in other words: the “Total Cost of Ownership (TCO)”. This budget – with a minimum of 3.000 euro and a maximum of 16.000 euro – will consequently be different for each employee, depending on the car that is exchanged and the employee’s fuel consumption.
What can the employee buy with this budget?
The employee may use the budget to spend on what is made available by the employer.
- Pillar 1: a more eco-friendly car, which is a company car without CO2- emission. The employer and the employee can also “skip” this pillar and go directly to pillar 2.
- Pillar 2: sustainable means and services of transport such as (electric) bikes, steps, subscriptions and tickets for public transport for both the employee and his family members living at home, collective transport or sharing solutions, a pedestrian allowance for the employee who comes to work on foot or with a scooter and skateboard, etc; In this pillar, you can also put the possibility to pay rent and interest on mortgage loans for employees whose residence is located at a maximum of 10 km from the normal place of employment or who work from home for at least 60% of their working time. This pillar is exempt from social security contributions and taxes. It is up to the employer to decide the services and means of transport he wishes to offer in this pillar. The employer is obliged to offer at least one thing in this second pillar!
- Pillar 3: balance in cash. If at the end of the year, there is still part of the budget left, this will be paid in a one-time cash payment, at the latest together with the salary of the month of January of the following year. This cash amount is subject to a special employee contribution of 38.07 %. The employer does not pay any social security contributions on this balance.
How can you introduce this mobility budget in your company?
This can be done in the same way as introducing company cars in a company, so by concluding a collective labour agreement, a policy, or through an individual agreement.
As soon as the employee asks the employer to benefit from the mobility budget, an agreement needs to be drafted between employee and employer. This agreement needs to be concluded before the mobility budget is provided to the employee for the first time. Further on, it needs to contain some mandatory provisions and is considered to be a so-called social document.