Cash for cars disappears, the mobility budget as an alternative?

The cash for cars-system, allowing employees to exchange their company car for money, has to end. That is what the Constitutional Court has decided. Soon, on 31 December 2020, the regulation no longer exists. What does that mean for you and your employees? Is the mobility budget an option? And how do you get started?

Let’s be honest: cash for cars has never really been a success. Very few employees exchanged their car for cash. But those who did, have to find an alternative: a company car, gross salary compensation (on which social and fiscal contributions are paid), or what about a switch to the mobility budget?

The mobility budget: more possibilities, more flexibility

The chances of success of the mobility budget already appear to be bigger. The cash for cars system bans the car completely. Perhaps you have employees who do need a car? That’s now possible within the mobility budget! As long as the CO2 emission is limited. In this way, the mobility budget opens up for many more employees.

But it doesn’t stop there. The mobility budget promotes freedom of choice, both for you as an employer as for your employees. It consists of 3 pillars:

• Pillar 1: an eco-friendly car
• Pillar 2: sustainable means of transport & housing costs
• Pillar 3: a cash-out to be paid by the employer at the end of the year

How do you get started?

Offering the mobility budget to your employees is easier than you think. Our step-by-step plan will get you started in no time!

1. Write a Mobility Policy

Decide how you want to offer sustainable mobility to your employees in a Mobility Policy. You can also add specific conditions, for example, employees can only join when their lease contract expires, or you can limit the housing costs to a certain amount.

2. Receive a written request

Does your employee want to switch to the mobility budget? Great! The regulation requires a written request from the employee, e.g. by email.

3. Define the budget

The mobility budget is based on the Total Cost of Ownership or TCO. This is the total annual cost of the car to which the employee is entitled. This TCO determines the budget. Don't know how to calculate the TCO? Ask your social secretariat for advice, they can most certainly help you.

4. Sign a contract addendum

Next, make sure to take care of the administrative part: sign a contract addendum. This document contains the agreement of your employee to switch his traditional car for a  budget, determines the size of the budget and the conditions.

Need help with creating a mobility policy or contract addendum? Your social secretariat can help, or download our templates.

5. Manage the budget

As soon as your employee starts with the mobility budget, he should be able to consult his balance at any time. Avoid the administrative hassle and use an HR platform such as Mbrella to manage the budget. We also link with your social secretariat to ensure a correct payroll.

Do you still have questions? We are happy to help! Contact us and we will take care of the rest!