In our newsletter of May 2018, we highlighted the scenario of introducing a mobility allowance that provides the employee with the possibility to exchange his company car for cash. A Law was published in the Belgian State Gazette of March 29, 2019, slightly modifying this mobility allowance.
Apart from that, a law was published on the same date, introducing the broader mobility budget as of March 1, 2019. We will discuss the new concept of the budget and the changes made to the allowance in the present newsletter.
The mobility budget
What is it?
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.
Am I obliged as an employer to offer this budget to my employees?
No. The principle of the free choice of the employer to introduce the mobility budget in the company remains.
If the employer wants to provide the budget, he must 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.
The employee is free to accept the offer of the employer. He must however have had a company car at his disposal or must have been entitled to one during a certain period:
- Minimum 3 months immediately preceding the application
- 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).
The minimum term of 36 months does not apply if the employee is employed by a starting company. The waiting periods of 3 and 12 months on the other hand, do apply. For all new hires as of March 1, 2019 onwards, the waiting periods of 3 and 12 months do not apply if the employee will perform a function that entitles him to a company car.
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 fiscal and the para-fiscal burden, 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 being exchanged and the employee’s fuel consumption.
For the employees who do not have a company car at their disposal but who are entitled to one, the budget is determined in function of the company car the employee would have chosen, or based on a reference car used for the job category of the employee.
What may the employee do with the budget?
The employee may exchange his company car for the following:
- Pillar 1: a more eco-friendly car. This is an electric car or a car with a maximum CO2-emission of 105gr/km (value for 2019, will be decreased to 100gr/km in 2020 and 95 gr/km in 2021). For rechargeable hybrid cars, the minimum energetic capacity of the electric battery must be 0,5 kWh per 100 kg car weight. 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. This pillar is exempt from social security contributions and taxes. It is up to the employer to decide on 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 (which will be January 2020 for the first time). 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.
How to introduce the mobility budget?
This can be done in the same way as introducing company cars in a company, so by concluding a collective labour agreement, a policy, or through an individual agreement.
As soon as the employee asks the employer to benefit from the mobility budget and the employer has accepted, an agreement needs to be drafted between employee and employer. This agreement needs to be concluded before the mobility budget is provided to the employee for the first time. Further on, it needs to contain some mandatory provisions and is considered to be a so called social document.
Modifications to the mobility allowance
As from January 1, 2018, an employee in the possession of a company car may exchange this for a monthly cash allowance. As from March 1, 2019, it is also possible to grant the mobility allowance when the employee is entitled to a company car. He does not necessarily need to have one at his disposal.