TCO Calculation
What is the TCO?
To calculate the federal mobility budget, the Total Cost of Ownership (TCO) of the employee's (reference) car must be calculated. It is important to discuss the broader context first.
The TCO calculation for the federal mobility budget is a TCO 2. It concerns the total annual gross costs for the employer of the returned company car or of the company car for which the employee is eligible. Below you can find more information about the definition of TCO 2.
- TCO 1 includes the cost of the vehicle and related car costs, the fuel costs and the CO₂ contribution.
- TCO 2 consists of TCO 1 and additional taxes related to disallowed expenses, linked to the deductibility percentage of the vehicle, on leasing costs, fuel costs and benefits in kind (17% or 40% disallowed expenses).
- TCO 3 corresponds to TCO 2 minus the tax savings, which are linked to the deductibility percentage of the recruitment costs, the related car costs, the fuel costs and the CO₂ contribution.
The employer determines whether the TCO is calculated per employee or per job category. If the TCO is calculated per function category, one (reference) vehicle is chosen that represents the category. In this case, averages are also used for all other car-related costs.
The government has established two formulas that the employer can choose to calculate the TCO for the federal mobility budget. Namely the actual cost formula and the fixed value formula. The method that the employer ultimately chooses and uses must be used for at least 3 years. This method is also used for all TCO calculations. Although you always use the fixed value formula for employees who do not benefit from a company car or for employees who change jobs to which another company car is linked. In these situations you do not (yet) have any actual costs that are required for the actual cost formula. In this respect, both formulas can still be active in the company.
Actual cost formula
This is an average of the employer's annual total gross cost of providing a company car to an employee. You calculate the average (if possible) based on the last four calendar years. For example, coincidental high or low costs in a given year are not used as the only reference.The actual costs that must be taken into account can be divided into four categories:
The company car
- Annual depreciation of 20 percent of the purchase price of the environmentally friendly company car or the costs of the rental or leasing. Taking into account the options and accessories charged and the discounts granted;
- Interest on borrowed capital;
- Fuel and/or electricity costs;
- Administration costs relating to fuel and charging cards;
- Costs for making the vehicle roadworthy;
- Insurance costs (incl. franchise costs);
- Costs of the technical inspection.
The charging station
- Annual depreciation of 20 percent of the cost of the charging station and its installation;
- Maintenance and repair costs of the charging station;
- Management costs of the charging station and cable.
Taxes and fiscal aspects
- Tax on registration;
- Road tax;
- Patronal CO2 solidarity contribution for the benefit of the RSZ;
- Non-recoverable VAT on all cost items;
- Tax on the non-deductible portion of the above items;
- Tax on the part of the benefit in kind that constitutes a disallowed expense.
Other costs
- Toll and parking costs;
- Cleaning, maintenance and repair costs;
- Costs of a replacement car;
- Costs for replacing, exchanging and storing the tires;
- Expert costs upon return of the vehicle at the end of the contract or in the event of a change of driver;
- Repair costs inventoried upon return of vehicle at end of contract;
- Management costs of services.
Fixed value formula
For the fixed value formula, you must make a division between rented or leased company cars and company cars owned or via financial leasing. In both cases you have to add a fixed component to a variable component.
Rented or leased company cars
The fixed component:
Annual rental or lease cost + average other annual costs* + non-deductible VAT + tax on non-deductible car costs + CO2 solidarity contribution
The variable (fuel) component:
(6,000 + one-way distance from home to work x 2 x 200) x 0.13
This corresponds to 6,000 private kilometers plus commuting for 200 working days, multiplied by 30 percent of the exempt flat-rate kilometer allowance that the state pays to its staff.
* This concerns all other costs that are not included in the lease or rental cost. The cost list under the “Actual Cost Formula” section is used here as a reference. An average cost of the past three years should be used here.
Company cars owned or through financial leasing
The fixed component:
Catalog value of the company car x 0.25 + tax on non-deductible car costs + CO2 solidarity contribution
We work with 25 percent of the catalog value. The government equates this to the cost of an average vehicle that travels 30,000 kilometers per year.
The variable (fuel) component:
(6,000 + one-way distance from home to work x 2 x 200) x 0.13
This corresponds to 6,000 private kilometers plus commuting for 200 working days, multiplied by 30 percent of the exempt flat-rate kilometer allowance that the state pays to its staff.
Do not forget!
- Adjustments may need to be made to the actual cost formula at the end of the calendar year or at the end of the lease contract. The actual costs must be taken into account here. Estimations that were not made correctly during the calculation must still be included in the mobility budget.
- Costs for business travel may always be ignored when calculating the TCO. The employer decides on this. If these costs are not included in the TCO, they must always be paid on top of the mobility budget.
- If the employer decides to switch from the actual to the flat-rate method (or vice versa) after a period of three years, this will only have consequences for employees who newly participate in the statutory mobility budget.
- Finally, if you, as an employee, pay a personal contribution to use a company car, the amount will be deducted from the federal mobility budget.
Example
The company wants to implement the mobility budget for its youngest job category. A TCO must be calculated for this. The chosen reference car for this category is a Seat Ibiza (25,000 km/year for 5 years, CO2 emissions 113 g/km), the company usually works with an operational lease. The company opts for the fixed value formula for simplification.
The data:
- The monthly lease cost for the car is 393 euros (excl. VAT);
- Other costs provided for in the car policy amount to 40 euros per month (excl. VAT) for car wash & parking. There is no charging station fee and fuel costs are not included in the lease cost;
- Corporate tax is 25%;
- The VAT deductibility is done at a flat rate, and is therefore 35%;
- The tax deductibility of the company car is 66.33%;
- The CO2 contribution is 383.88 euros;
- The average commuting distance of the category is 15 km (one way).
The calculation:
Lease costs & other costs:
393 euros x 12 = 4,716 euros + 40 euros x 12 = 5,196 euros.
VAT:
5,196 euros x 21% VAT = 1,091.16 euros x 65% (non-deductible VAT) = 709.26 euros.
Tax:
5,196 euros x 33.67% (rejected expenses) x 25% = 1,749.49 euros.
Fixed component:
5,196 + 709.26 + 1,749.49 + 383.88 = 8,038.63 euros.
Variable component:
(6,000 + (15 x 2 x 200)) x 0.13= 1,560.00 euros.
The TCO of the Seat Ibiza, or the mobility budget for the junior category:
8,038.63 + 1,560.00 = 9,598.63 euros.
FYI!: This budget may never be less than €3,055 (2024) and never more than 20% of the employee's total gross annual salary, with a maximum of €16,293 (2024).
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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.