Mobility budget

Better understand the legal mobility budget? Find here what can and cannot be done!

Why introduce a mobility budget?

Introducing a mobility budget has several advantages for both employers and employees. First, it gives employees more freedom of choice in how they travel to work. Instead of a fixed travel allowance or company car, employees can decide how to spend their mobility budget. This allows them to choose, for example, an electric bike or public transport, which can contribute to a more sustainable society.

In addition, a mobility budget can also be cost-saving for employers. Instead of reimbursing fixed travel expenses, a mobility budget can be set up where employees make their own choices. This allows the budget to be used more efficiently and saves costs.

Finally, introducing a mobility budget can also help reduce congestion and improve the accessibility of companies. Giving employees more choice in how they travel to work can reduce pressure on roads and make better use of public transport.

What is a mobility budget?

A mobility budget is a budget in a flexible remuneration plan created by the employee waiving the cost of a car in the salary package. That budget can legally be spent in three pillars. Sustainable cars, alternative mobility & accommodation and cash payout.

A mobility budget can be used in several ways. For instance, an employee can choose to use part of the budget to buy or lease an eco-friendly car or bicycle. The budget can also be used to pay for public transport, rent a shared car or pay for housing costs (rent, mortgage).

The mobility budget is usually set based on the cost of a car that an employer normally incurs to offer a leased car in an employee's pay package.

The Mobility Budget can bring benefits to both the employer and the employee. For instance, it can contribute to the sustainability of the company and can ensure better accessibility to work. The mobility budget can also provide tax benefits for the employee and can contribute to a better work-life balance but simply mean a larger net wage for the employee.

What is the total cost of ownership?

TCO stands for the 'total cost of ownership' of a company car - the total cost associated with the provision of a company car.

The Total Cost of Ownership of the car an employee is entitled to or TCO is used in the statutory mobility budget to start determining the total budget an employee has to spend in the different pillars. The TCO includes all the costs of a car, including purchase price, fuel costs, maintenance, repairs, insurance and taxes.

How do I calculate the TCO?

Unlike traditional company car leasing budgets, a TCO approach includes all costs, with the main additional factors being fuel or charging costs and (para)tax charges.

Thus, the TCO budget of a company car will concretely consist of:

  • the lease costs (usually including insurance and maintenance costs)
  • the fuel or loading costs
  • the non-deductible VAT
  • the corporation tax on the non-deductible car costs
  • the CO2 solidarity contribution for social security
  • the expense allowances related to the company car (e.g. monthly flat rate of EUR 15 for parking)
  • less the own contribution paid by the employee

A concrete worked out example of a TCO calculation can be found via the link!

How does a cafeteria plan compare with an MB?

A cafeteria plan and a mobility budget are both elements that can be offered by employers to employees to offer more flexibility in the salary package.

A cafeteria plan allows employees to use part of their salary to purchase benefits in order to enjoy a tax advantage. This budget can be used for various benefits such as multimedia, hospitalisation insurance for your partner, extra contribution for cars, etc.

A mobility budget is a legally regulated choice that can be offered by an employer to employees to create a fixed budget that employees can use to finance their commuting. Here, the budget can be used for different means of transport, such as a bicycle, public transport or a leased car. The mobility budget thus offers employees more freedom and flexibility in their transport choices.

Compared to a cafeteria plan, a mobility budget thus offers more targeted support for employees who want to optimise their commuting. However, a cafeteria plan offers more flexibility in the choice of working conditions and may also include other important benefits, such as a higher pension or extra holidays.