Commuting Allowances
Table of contents
What are commuting allowances?
Commuting allowances are allowances that employers give to employees to cover the costs of traveling between their place of residence (domicile address) and their workplace. A detour, for example to go shopping, will not be reimbursed. The shortest route between the place of residence and the workplace is reimbursed. These benefits can take several forms and are intended to compensate employees for the time and costs associated with the daily commute.
For your information: With the bicycle allowance, the shortest route does not have to be chosen. In consultation with the employer, the shortest route may be deviated from. Here, for example, you can choose the safer but longer route.
What commuting allowances are there?
Below are some common types of commuting allowances:
Public transport travel allowance: Employees who travel by public transport receive reimbursement for their travel costs. A third-party payment arrangement or an intervention in travel costs can be used based on the mandatory (sectoral) rules;
Bicycle allowance: Employees who cycle to work must receive a bicycle allowance. This is a compensation per kilometer cycled;
Mileage allowance for your own transport: This is a reimbursement per kilometer driven. The employee receives a certain amount per kilometer that he or she travels between home and work with his or her own vehicle (e.g. car, foot, scooter);
Carpool compensation: Employees who carpool can receive compensation, depending on whether or not the carpool is organized by the employer.
What are the (para)fiscal rules?
In Belgium, tax rules apply to commuting allowances. It is important for both employers and employees to be aware of the applicable rules and to properly administer reimbursements. These tax rules are often drawn up at company or sector level. So be sure to check out the sectoral and company collective labor agreements.
In general, it can be said that many reimbursements are tax-free for employee and employer up to a certain amount. No social contributions are paid on these allowances. Furthermore, in most cases these reimbursements are fully deductible as actual professional expenses in your tax return.
When do I have to pay a commuting allowance?
Company car
If an employee has a company car available, there is no obligation to pay a commuting allowance. The employee already receives a company car (with fuel or charging card).
Public transport
Compensation
There is an obligation at national level to intervene when the employee travels to work by public transport. Companies must reimburse at least 71.8% of the cost of the train subscription (February 1, 2024). These rates can be found on the NMBS website. One of the following rules applies to other public transport (tram, metro, bus, water bus). When the:
Price of transport is independent of distance, a compensation of 71.8% of the price is applied;
Limitation to the intervention provided for the train for a distance of up to 7 kilometers. That corresponds to 43 euros per month.
The price of transport depends on the distance, the compensation corresponds to that for the train;
Limited to 75% of the real price of transport.
The above only applies if the sectoral joint committee has no regulations regarding public transport reimbursements.
Third Party Payer Agreement
Reimbursements for public transport are most easily paid via a third-party payment scheme. Through this scheme, employees can directly apply for a subscription from the chosen transport company in Mbrella. The transport costs are charged directly to the employer, so there is no longer a need for reimbursement. This means that the employer no longer has any administrative burden. With a third-party payment arrangement, the employer must pay at least 80% of the cost of the subscription. The remaining 20% of the cost of the subscription is paid by the state. This gives the employee free public transport. A win-win situation!
For your information: The VAT on public transport subscriptions of 6% is deductible by the employer.
Bicycle allowance
As an employer, you are obliged to pay a bicycle allowance to employees who come to work with a bicycle (bicycle, electric bicycle, speed pedelec, cargo bike, etc.). This does not apply if the employee already receives another commuting allowance. For example, if the employee has an NMBS annual season ticket, there is no obligation to pay a bicycle allowance.
Companies that did not pay a bicycle allowance before May 1, 2023 are covered by the Collective Labor Agreement 164. This collective labor agreement obliges these companies to provide a bicycle allowance of 0.28 euros per kilometer (2024), with a maximum of 40 kilometers per day.
All other companies follow the bicycle allowance rules as determined in the company collective labor agreement or in the joint committee.
As an employer, in addition to your mandatory minimum, you can usually also provide more bicycle allowance tax-free to employees, in order to (even more) promote cycling to work. The maximum exempt bicycle allowance is 0.35 euros per kilometer with an annual limit of 3,500 euros (2024).
For your information: Since July 1, 2024, companies in PC200 must pay a minimum of 0.27 euros per kilometer bicycle allowance, with a maximum of 40 kilometers per day.
Mileage allowance for your own transport
Employees who come to work on foot, in their own car or with a mobility device (e.g. scooter) are not entitled to a commuting allowance.
For your own car, an obligation is often drawn up in the joint committee, so-called the social subscription. So don't forget to look this up!
If this is not the case, or the employee travels to work in a different way. A total compensation can be given to the employee up to 490 euros per year tax-free (2024). The reimbursement for professional kilometers is often followed here.
For your information: Professional travel with your own car can be reimbursed tax-free. Depending on the joint committee, it follows one of the two following compensations:
- Quarterly adjustment 0.4297 euros per kilometer (July 1, 2024 - September 30, 2024)
- Annual adjustment 0.4415 euros per kilometer (July 1, 2024 - June 30, 2025)
Carpool allowance
Compensation can be given to the employee depending on whether the employer organizes the carpool or not.
- Organized communal transport from the employer (e.g. internal carpooling system or office bus): Tax-free up to the price of a first-class train subscription for the same distance (Adapt);
- Organized carpool from the employee: Maximum €490 per year tax-free. (See: “Kilometer allowance for own transport”)
What about the federal mobility budget?
If the employee has opted for the federal mobility budget, there is no longer an obligation to provide the following commuting allowances:
- Bicycle allowance;
- Public transport allowance;
- Reimbursement for organized communal transport.
These allowances must then be requested, if desired, via the federal mobility budget by the employee. In other words, these allowances cannot be paid in addition to/on top of the federal mobility budget.
An exception exists for employees who already received this allowance for a period of three months before applying for his/her mobility budget. These employees can continue to receive this compensation on top of the mobility budget. This is a choice of the employer whether or not this is permitted.
For your information: Within the federal mobility budget, an employee can apply for a commuting allowance for his travels on foot or with a mobility device (e.g. scooter). This compensation, within the federal mobility budget, then follows the regulations for the bicycle allowance (See bicycle allowance).
What steps do I need to take for this?
A mileage allowance must be registered. This registration serves as the burden of proof for the social inspection. In Mbrella you can use the commute planner to provide this burden of proof. The commute planner not only serves as the burden of proof, but is also automatically linked to the payment of the compensation. In Mbrella you indicate what fee you want to pay, who has access to it, and what amount is linked to this. There is hardly any work for the HR manager throughout the year.
Finally, a third-party payment agreement must be agreed between the employer and the public transport company. The application for a third-party payer agreement can be made directly via Mbrella. Your request will then be processed and confirmed automatically. Afterwards, employees can purchase subscriptions in the Mbrella platform.
Avoid the hassle of finding the right formula for your TCO.
With our free TCO Calculator template you can start calculating your mobility budget in no-time.
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FAQs
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When your employees hit the road to a customer or to an event, they often have mobility-related expenses like parking, public transport, electric steps,.... These professional expenses can be reimbursed via a business budget.
The flex budget can be used in multiple ways. The budget can be a reward for the employees that didn't drive many kilometers last year. It can be a budget that the employee can use for his/her commuting expenses. The flex budget can even be used to handle the mobility part of your flex income plan (cafetariaplan).
Depending on the expenditure taxes and social contributions are paid. Commute expenses for parking, bike and public transport are tax and social contribution free. Commute expenses for other mobility services are not tax free, this can influence personal tax income (employee) & company tax (employer). But are social contribution free. Mobility Expenses for private reasons are handled like it is gross wage.
The Flex mobility budget is a budget that all employees can use to reimburse their sustainable mobility expenses. They can spend the budget on public transport, parking, electric steps, shared bikes... instead of limiting their options to only train for instance. It's the ideal alternative for companies that don't meet the strict conditions of the federal mobility budget or who want to reward their employees with a sustainable perk. But no housing costs are possible, and taxes and social contributions are paid depending the expense type.
The federal mobility budget can not exceed 20% of the total gross wage of the employee (gross wage + all other benefits, but no holiday payment). Besides this the federal mobility budget can not be higher than 16.293 euro and not lower than 3.055 euro (figures of 2024).
Mbrella is the first corporate mobility solution that is designed to empower employees and unburden HR professionals completely. We offer software that helps you manage mobility budgets, commuting allowances, public transport subscriptions and much more.
If you live within 10 km of your normal place of work, you can finance rent or mortgage interests and capital payments with the federal mobility budget. Is your normal place of work explicitly mentioned on your employment contract BUT do you usually (more than 50%) work somewhere else (like from home)? Then your 'normal place of work' can be your actual place of work. Be careful that your employer needs to prove this to the Administration.
Depending on the reimbursement history of the company to the employee the bike allowance, the public transport reimbursement, the employer organized carpool reimbursement and the provision of a company bike can be on top or within the federal mobility budget if the allowance was there at least 3 months before the request for the federal mobility budget.
No, employers are not required to offer all mobility options within the federal mobility budget. They have the flexibility to choose which options to provide, based on their company policy and the needs of their employees. Employers must ensure clear communication about the available options to their employees. Expense categories can be managed in Mbrella.
Belgian employers are not required to offer the federal mobility budget to every employee with a company car. It is a voluntary option that employers can provide, and both the employer and the employee must agree to participate in the mobility budget system. This allows for flexibility and negotiation between the employer and employee regarding whether to switch from a company car to the federal mobility budget.
Yes, the federal mobility budget benefits smaller companies by being cost-neutral and enhancing employee satisfaction through flexible, eco-friendly transport options, while offering tax advantages and supporting sustainability goals.
To calculate the allowed mobility budget, you need to determine the Total Cost of Ownership (TCO) of the company car. This including all related expenses such as purchase or lease price, fuel, insurance, maintenance, taxes, and depreciation. You can use the actual costs formula or the lump-sum formula. The chosen calculation method should be used consistent within your company. Mbrella can help you calculating the TCO.
Employees eligible for the Federal mobility budget must either have a company car or be eligible for one under their employer's (car) policy. The previous waiting period requirement has been removed, allowing immediate eligibility. However, the mobility budget can only available if the employer meets some requirements (See "Is my company eligible to offer the mobility budget?")
Companies eligible for the mobility budget must meet specific criteria. Primarily, they need to have made one or more company cars available to their employees for an uninterrupted period of at least 36 months immediately before implementing the mobility budget. This eligibility ensures that the mobility budget can serve as an alternative to the company car system, promoting more sustainable transportation options.
The Federal mobility budget is a flexible system allowing employees to exchange their (right to a) company car for a budget. This budget can be spent on eco-friendly cars, sustainable transport options, and housing costs. Unused budget can be received as cash at the end of the year at a favorable tax rate. This offering tax benefits and promoting sustainable mobility.