Mobility budget - update
In our newsletter of 10 April 2019 , we informed you about the possibility to introduce a mobility budget for your employees. 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 budget as he wishes in 3 pillars, taking into account the offer made by the employer in those pillars.
A Law published in the Belgian State Gazette of 3 December 2021 has modified this mobility budget. Additionally, the tax authorities have published some circular letters, which discuss these changes. We summarise these changes for you in the present newsletter.
Scope
The principles stay the same: the employer chooses whether or not to introduce the mobility budget in the company and the employee is free to accept the offer of the employer.
New: From 1 January 2022 the employee no longer has to go through a waiting period. Before this date, the employee must have had a company car at his disposal or must have been entitled to one during minimum 3 months immediately preceding the application and during minimum 12 months during the 36 months preceding the application. Whether an employee is entitled to a company car or not needs to be derived from the employer’s company car policy (e.g. a written car agreement).
However, the employer who wants to provide the budget must still have offered company cars without interruption for at least 36 months preceding the budget. This condition does not apply to new employers. They have to have offered at least one company car to at least one employee when the mobility budget is introduced.
How is the budget determined?
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 will consequently be different for each employee, depending on the car that is exchanged and the employee’s fuel consumption.
New: From 1 January 2022, the mobility budget must be a minimum of € 3,000 and a maximum of € 16,000 per year. Maximum 1/5 of the employee's total gross salary may be budgeted as a mobility budget.
What can the employee do with the budget?
The employee may exchange his company car for the following :
- Pillar 1 : a more eco-friendly car.
New: From 1 January 2026, this may only be a company car without CO2- emission. This eco-friendly car is subject to the same social security and tax withholdings as a classic company car.
- Pillar 2 : sustainable means and services of transport such as (electric) bikes, steps, subscriptions and tickets for public transport, collective transport or sharing solutions, etc.
New: Since 1 January 2022, the employer is obliged to make at least one offer in this pillar!
New: The possibilities in this pillar have been expanded since 1 January 2022 and now also include the possibility to spend this budget on:
- financing costs for: bicycle loans, storage costs for bicycles, electric motorcycles and equipment to increase visibility, etc;
- season tickets and tickets for all journeys by public transport for both the employee and his family members living at home;
- parking costs incurred by the employee to use public transport;
- a pedestrian allowance for the employee who comes to work on foot or with a scooter, skateboard, etc. The maximum amount to be awarded is equal to the maximum bicycle allowance (currently 0.25 €/km). This pedestrian premium can only be granted within the framework of the mobility budget.
The possibility to pay rent and interest on mortgage loans with this budget already existed for employees whose residence is located at a maximum of 5 km from the normal place of employment. This is now being expanded to 10 kilometres and capital repayments of mortgage loans are now also eligible.
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.
- 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. It is therefore not possible to make an advance payment during the 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.
Action point: in the context of the employees' desire for flexibility as well as a more eco-friendly mobility policy, the extensive mobility budget can be an interesting solution for you. Do not hesitate to contact us for more information.
