The mobility budget is a yearly budget that employers can assign to employees who currently have or are entitled to a company car. The specific budget is individually geared to each employee and equals the total cost of ownership (TCO) of the company car for the employer, which includes both the purchase price of the car and costs for fuel and insurance. Employees who give up on their company car can use the mobility budget to commute in a more flexible manner. The available budget can be distributed across three pillars.
The first pillar is the shift to a more environmentally-friendly car. Employees can invest (part of) their budget in a car with maximum emissions of 105 grams of CO2 per kilometre in 2019, 100 grams of CO2 per kilometre in 2020 and 95 grams of CO2 per kilometre in 2021. For plug-in hybrids, the battery should have a minimum capacity of 0.5 kWh per 100 kg of the car’s weight.
If they have any money left, they can use it to pay for other modes of transport, such as the train or an electric bicycle. Or - if they live within a 5km radius - they can offset part of their house's rent or mortgage interest. Those options fall under the second pillar.
The third pillar is for employees who still have some budget left at the end of the commute. They receive the remainder in cash, following payment of social-security contributions at 38.07 per cent.
It is important to note that employers are not obliged to introduce this flexible budget in their companies. They decide whether or not employees have the option of exchanging their company cars. Likewise, employees can also opt out.
Employers that want to offer the mobility budget may do so provided they have been offering their employees company cars for at least three years. This condition does not apply to new businesses, which can implement the new measure straight away.
Please note that some employers have had a ‘mobility budget’ in their companies for a while, for example to encourage their employees to cycle to work more often. It is important to distinguish those budgets from the new system, which only applies to employees who have a company car.
It is also important to highlight that there are certain conditions for the employees as well. Employees can only request the mobility budget if they have had (or have been entitled to) a company car for at least a year. That condition does not apply to new recruitments or someone who has been promoted. Newly recruited employees can request the budget from day one. The same applies to employees promoted to a position which includes a company car, if the promotion was granted before the new law came into force.
The fiscal framework
The fiscal framework for the employer is as follows:
Tax on the company car: the CO2 solidarity contributions and the rejected costs on the benefit in kind must be borne by the employer, as was the case for classic company cars. By opting for a greener model, those taxes will decrease, though the tax deductibility for the employer may also increase.
Tax on sustainable modes of transport and housing: the employer does not pay any taxes and social-security contributions on sustainable modes of transport or housing.
The remaining annual cash payment: the employer must pay a special contribution of 25 per cent on this amount.
“Athlon provides a custom mobility solution”
“The mobility budget is an important step towards more flexible mobility in Belgium”, Erwin Ollivier, General Manager at Athlon Manager, explains. “If we want to tackle traffic jams and shift towards more sustainable transport, we should all start combining various modes of transport. Greener cars and a wider mobility offer are part of the solution.”
As a leasing company, Athlon has been a pioneer for several years in offering alternative mobility solutions. Now that the federal government has also jumped on the bandwagon, the expertise built up in this mobility mix definitely comes in handy. “We have the knowledge and experience to advise companies on the development of custom mobility solutions. That is one of the packages we are planning to focus on further in the years ahead.”
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