23 December, 2021

What are the costs to the employer?

Wat zijn de kosten eigen aan werkgever 1

As an employer, you are obliged to provide your employees with the necessary tools and materials for their work. This also includes the reimbursement of certain costs that employees have incurred in the course of their work. These are also called "costs proper to the employer" .

Examples of such costs are costs for parking, representation, fuel, car wash, home office, internet connection,...

The reimbursement of these costs can be done in two ways:

  • through expense accounts for actual costs
  • through the application of forfaits accepted by the NSSO and the tax authorities

In many cases it is convenient to work with lump sums for two reasons:

  • Operational simplicity (no need to keep track of tickets as an employee)
  • Financial advantage (the lump sums are in many cases higher than the employee's actual costs - so there is often a net advantage for the employee).

Note that employers must always have a justification for the amount of costs that are reimbursed. And this regardless of the type of costs that are reimbursed on a fixed basis. This flat-rate reimbursement must correspond to reality as much as possible. If not, there is a suspicion of concealed pay, for which there are real penalties!

Therefore, not every employee can claim a lump-sum cost allowance just like that. As an employer, you must be able to demonstrate that this is plausible for a particular employee, taking into account his job description and working conditions.

But what kind of expenses can you actually pay to your employees? The most frequently reimbursed expenses are:

  • Home working costs,
  • Representation costs,
  • And mobility costs

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Wat zijn de kosten eigen aan werkgever 2

Home working costs

Home office costs are costs that an employee incurs for the furnishing and use of an office in his private home. Specifically, it is the cost of small office equipment, the cost of maintenance and cleaning of the office, the cost of electricity, water and heating, insurance, drinks and snacks, etc.

In addition to these costs, you can also compensate your employees for the professional use of a private internet connection and the use of their own PC. 

Download our salary guide for a handy overview of the lump sums you can use.

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Representation costs

Some employees have a representative function within the company. They invite customers and partners, they participate in business events, they go out on the job to maintain relationships. Typical examples are sales representatives, partnership managers, etc. This may involve a number of representation costs, such as refreshments, dry cleaning, gifts, etc.

The representation expenses are classically a category of expenses that is not so transparent and sometimes carries (unjustifiably) high amounts. During inspections by the tax authorities and the NSSO, reimbursements of these costs are therefore viewed very strictly .

We recommend to pay a maximum of EUR 120 per month for representation expenses for the highest, representative positions (directors). Note that this maximum amount should be lowered to EUR 50/month anyway in case job allowances are already granted.

Download our salary guide for a handy overview of the lump sums you can use.

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Wat zijn de kosten eigen aan werkgever 4

Mobility costs

Although working from home is here to stay, employees will still need to travel to and from the workplace, an event or another professional matter.

How to compensate them net is explained below.

Costs related to the company car

Together with the availability of a company car, the employer can also pay three types of monthly allowances. The granting of these allowances must be formalised in a car or mobility policy.

Costs of professional relocation

If, as an employer, you do not provide a company car, it can be agreed that the employee can use his own car for professional travel in exchange for an allowance (note that home to work travel is not a professional travel). If you want to give this allowance tax-free, it can amount to a maximum of €0.3707/km! If the employee does this by bike, the maximum tax-free allowance is €0,24/km.

Commuting costs: car

As an employer, you can grant different types of allowances for home to work trips, depending on the means of transport actually used.

If the employee uses public transport, you can either reimburse your employer for the cost of the season ticket or reimburse the service provider directly (third-party payer scheme). In this case, the reimbursement received is tax exempt for the amount of the season ticket.

Commuting costs: bicycle & walking allowance

If the employee uses a means of transport other than public transport (e.g. on foot or in a company car), the compensation granted by your employer can be tax exempt up to a maximum of 420 euros per year.

If the employee uses the bicycle for commuting, the received mileage allowance can be exempted up to a maximum amount of EUR 0.24 per km travelled.

In some joint committees it was even decided recently to pay an obligatory bicycle allowance to employees who come to work by bicycle. For example, in PC 200, since July 2020, there is an obligation to pay a bicycle allowance of min. €0,10/km (and max. €4/day) to employees who come to work by bicycle.