Mobility budget

A mobility budget is a term often heard in recent years, but what does it actually entail? Is it interesting for an employee and an employer to implement a mobility allowance? And what are the advantages and disadvantages of this new mobility? In this article, we inform you about the changes within mobility schemes.

Example gross/net mobility budget
With a gross mobility allowance of € 1,000 per month, the employee pays income tax over the entire amount. For a net mobility budget of € 1,000 per month, the number of kilometres driven is taken into account. Suppose that 2,000 kilometres are driven every month, this means 2,000 x € 0.19 = € 380. This amount is deducted from the monthly budget, making the net mobility budget € 620. Only wage tax is paid over this amount.  

The advantages and disadvantages of a mobility budget

Benefits for employees
→ Freedom of choice. Employees decide how they use the monthly allowance and choose the transport that suits them.

→ The remaining amount is paid out as gross salary. When an employee is smart with his budget and its implementation, he/she probably keeps an amount that is paid out as gross salary.

→ Employees do not pay an additional tax for a private car.

→ Flexibility. Employees can fulfil their mobility wishes at their own discretion.

Benefits for employers
→ Costs are controllable and therefore easier to manage. The costs are determined in advance, so there are no surprises. 

→ Companies are not tied to long-term lease contracts. If an employee leaves early, the company is not left with a superfluous lease car. A personal mobility budget is linked to the duration of the employment contract.

→ A mobility allowance is an interesting secondary employment condition. The younger generation has an increasing need for freedom of choice. A company that gives them the freedom to choose the means of transport they use to commute to work is therefore in great taste with this young, talented target group.

Disadvantages for employers
→ Implementation of a mobility budget. This must be done carefully to create a broad support base within the organisation and to enable a smooth transition. Since the mobility budget is linked to the employee's travel needs, implementation requires a lot of customisation. It is therefore strongly recommended to involve a partner with expertise. 

Disadvantages for employees
→ Whereas the employer benefits from not being bound to the company by lease contracts, the employee is bound to the contract. The employee will therefore have to deal with a BKR registration. The employer must properly inform the employee about the possible consequences of this BKR registration.

The best of both worlds

Is there a middle ground? Yes, there is. As an employer, it is also possible to consider a mobility budget as an overarching principle. It is possible to have the employee lease a car on a full operational basis. This operational lease amount is deducted from the total budget. If the employee has any budget left over, this can be paid out as a mobility allowance for alternative transport methods. The full operational lease contract is concluded for fewer kilometres, which results in lower monthly costs for the lease car. By means of an agreement between employer and employee, it can be agreed that the employee takes the full operational lease car with him when he (voluntarily) transfers to another employer. In this way, everyone is aware of the need to travel, costs are controlled and all parties have the benefits of flexibility.

Do you have any questions or want to know what we can do for you regarding mobility arrangements within your company? SB Lease is at your service at all times.