Mobility Budget - Updates in 2024
In our newsletter of 26 April 2022, we informed you about the modifications in the mobility budget. In the meantime, additional modifications have been implemented, which we would like to explain to you in this newsletter.
What exactly does "mobility budget" refer to again?
The mobility budget is the possibility offered by the employer to its employee 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 provided by the employer in those pillars.
What’s changing?
1. Calculation of the budget
The principle of the mobility budget is that the company car which is being exchanged or to which the employee is entitled corresponds to an annual budget, namely the actual yearly employer cost of this company car (Total Cost of Ownership, "TCO").
Until recently, there was no legal provision to calculate this TCO. This has now changed because of the publication of a Royal Decree, which determines the calculation of this TCO.
As of 1 January 2024, employers can choose between calculation methods:
- Based on actual costs. The Royal Decree lists the costs that the employer can include in the calculation of this annual cost based on an actual costs.
- On a lump-sum basis. There are two options in this case: a formula for the leased car based on the leasing cost and another for the car purchased by the employer based on the catalogue value.
The employer who chooses a particular method must wait 3 years before he can make another choice. Please note: if the employer chooses a different method, this will apply to employees who enter the system from that date onward. Existing agreements remain valid in the existing system. The method chosen must be applied to all employees of the company.
It is still possible – as was the case before – to use a reference vehicle which will apply to the function category to which the employee belongs.
This clarification of the TCO calculation applies both to the calculation of the available budget as well as to the costs of the car in pillar 1. An employer could therefore opt for 2 different formulas: for example, the lump-sum value for the mobility budget and the actual costs for the car in pillar 1.
2. Full amount on the virtual account of the employee
Starting from 1 January 2024, the employer will make the entire mobility budget available to the employee on a mobility account, and will no longer deduct the amount in pillar 1 (environmentally friendly car) first.
3. Other modifications
Besides the modification to the calculation of TCO mentioned earlier, some smaller modifications were also made to the mobility budget.
We briefly explain them below:
- Pillar 2 provides for the use of various sustainable means of transport. This entire pillar will now be able to be used in the European Economic Area (EEA). Thus, in the EEA, it will not only be possible to use public transport, but also taxis, rental cars, etc.
- As from 1 January 2024, the minimum threshold of 3.000 EUR and the maximum threshold of 16.000 EUR will be indexed annually. In 2024, the thresholds will be 3.055 EUR and 16.293 EUR respectively.
- It was already possible to include management costs in the mobility budget. This does not change, but where they were previously included in pillar 1, they will be part of pillar 2 from 1 January 2024. As a direct consequence, they will now be fully exempt.
Point of action: 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.
