From company car to mobility budget

Our mobility needs are changing. More and more people are asking themselves if they really need that ‘big company car’. Of course, a nice company car on the driveway looks good, but it also comes with a significant tax penalty – if the car is used privately, that is.

If you live and work in Maastricht, for example, it's better to cycle or use an e-bike to get to work, or use public transport. Increasingly, employers are switching from lease budgets to mobility budgets. This allows employees to decide for themselves how they travel.

The mobility budget is a relatively new mobility trend and a flexible alternative to company car leasing. The mobility budget gives employees the freedom to choose how they travel themselves – within the limits of their budget. Employers are therefore increasingly deviating from traditional leasing arrangements and switching to the mobility budget.

How does the mobility budget work?

With the mobility budget, an employee receives a certain amount of money, which they can spend freely on their transport. If an employee saves on their travel expenses, they will receive the remainder at the end of the year. Although they will still have to pay tax on this. Due to increased (cost) awareness, the employee will opt for the easiest and most economical transport solution. This is good for them and the employer, who thus gains control over commuting costs and is no longer tied to long-term lease contracts.

This is naturally good news for the environment too, as with a mobility budget, employees will more often opt for the (electric) bicycle, choose a smaller, more economical (lease) car, use a car-sharing service, or rent a car instead of leasing one.

Mobility budget and the tax authorities

There is no separate tax scheme for the mobility budget. If you receive the mobility budget as a gross amount, you will pay income tax on the full amount. With a net mobility budget, the kilometres you drive for business purposes (commuting, business trips) using your own vehicle are tax-exempt. For this, a rate of €0.19 per kilometre driven applies.

For example, if you drive 500 km in a given month, you can deduct 500 x 0.19 = €95 from your monthly mobility budget. You then pay income tax on the remainder. However, there is also something known as a ‘tax-free allowance’ under the so-called work-related expenses scheme, which allows you to deduct a further 1.21% of the total wage bill from your annual mobility budget.

Enquire with your employer about the possibilities of the mobility budget. Perhaps this option already exists within your organisation, but you are not yet aware of it. Quick and easy hire a removal van in the Heerlen regionThis is possible at Adrem Car Rental!