Dinner with customers? Use of own mobile phone or laptop? Home office? You name it! These are just a few examples of costs that are often reimbursed by the employer to employees. After all, these costs are incurred for professional purposes and are therefore borne by the employer. However, there is no legal definition of costs to be borne by the employer. The assessment of whether a cost is to be borne by the employer can therefore vary from case to case.
Exempt from tax and social security
The NSSO and the tax authorities also recognise this reality and accept that a reimbursement of costs proper to the employer cannot be considered as salary. A reimbursement is therefore exempt from employer and employee social security contributions and taxes. On the part of the employer, a reimbursement of such costs is tax deductible.
The reimbursement of these costs to the employee should ideally be done on the basis of supporting documents (invoices, VAT receipts, receipts, etc.). Although this method of working involves a lot of administration, it leaves little room for discussion with the social security and tax authorities.
In order to avoid the administrative burden, the NSSO and the tax authorities accept that the employer and the employee can agree on a flat-rate estimate of the costs incurred (per month). This is a fixed amount per cost category (e.g. representation or home work) that is in principle unchangeable and that is supposed to cover all costs in a certain category. Because the flat-rate valuation of the costs is not easy (and many employers see an opportunity to use high amounts), the NSSO and the tax authorities have issued guidelines (separately!) on the amounts they accept as 'realistic' and 'acceptable'.
Home working allowances
Popular are, for example, the lump sums for the costs related to home work. For example, employees who regularly perform part of their work at home and therefore have an office there, can count on a lump sum payment of about € 127 per month. This amount would cover the costs for electricity, heating and small office equipment. An additional €20 would be added in case the employee uses his own internet connection or PC.
Employers must be able to justify their system of cost reimbursement and prove that these lump sums correspond to reality. For example, not every employee can claim a lump-sum cost allowance just like that: employers must be able to prove that it is plausible for a particular employee, taking into account his job description and working conditions.
A well-documented expenses policy is therefore worth its weight in gold! Questions about the implementation of this interesting track? Do not hesitate to send an e-mail to firstname.lastname@example.org!