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March 1

On 28 February 2019, Parliament adopted the Act on the Introduction of the Mobility Budget. This measure, which had been announced by the Government some time ago, has finally been formalized in legislation. Besides the mobility allowance (introduced by the Act of 30 March 2018), the employers and employees now have another possible alternative to the company car as of 1 March 2019.

1.       What?

The mobility budget allows employees to have a budget in order to opt for alternatives to their company car. The employee will be able to use the budget in three pillars and can choose one of the three pillars or a combination of different pillars, within the limit of the allocated budget.

1. In the first pillar, the employee can opt for a more eco-friendly car (electric or with a CO2 emission < 105 grams per kilometer).
2. In the second pillar, the remaining budget (which has not been used in the first pillar) can be allocated to the financing of sustainable means of transport :

  • soft mobility such as bicycles, electric bicycles, speed-pedelecs or electric mopeds,
  • public transport, both for season tickets and single-journey tickets,
  • collective transport organized by the employer or a third party,
  • shared means of transport such as carpooling, shared cars, taxis and renting of a vehicle with a driver,
  • mobility services that combine the 4 aforementioned means of transport.

Some housing expenses, namely rents and interests on mortgage loans, are also taken into account in the second pillar if the domicile is located within 5 km of the normal place of work.

3. In the third pillar, the remaining budget (which has not been used in the first two pillars) is granted in cash.

Each pillar has its own (para)fiscal treatment (see below)

2.       For whom?

For both the employer and the employee, certain conditions must be met in order to be able to implement the mobility budget. With these conditions, the legislator wants to prevent employers from granting a company car for a short period of time and then replacing it with a (para)fiscally advantageous allowance. There are, however, specific rules for new employers.



Has provided one or more company cars to one or more employees for an uninterrupted period of at least 36 months before implementation.

Effectively has a company car or has been eligible to one for :

1) 12 months during the 36 months prior to the application with the current employer

2) at least 3 months without interruption at the moment of application

Exception for starting employers (active for < 36 months)

Exception in case of :

1) Hiring

2) Promotion or change of function before the Act enters into force (1 March 2019)

3.       How? 

The employer has the freedom to decide whether or not to introduce a mobility budget and to decide whether to grant it to all or part of the staff. If the employer decides to implement a mobility budget, the employee who wishes to benefit from the mobility budget must ask the employer in writing.

The formal request of the employee and the positive response of the employer to this request constitute an agreement whose content forms part of the employment agreement between the parties. This agreement specifies, among other things, the base amount of the mobility budget.

4.       What budget and for how long?

The amount of the mobility budget is equal to the “total cost of ownership” of the company car. This amount includes, among other things, the monthly leasing or rental price, the fuel expenses, the insurance and all the expenses relating to a company car, such as the non-deductible VAT. The mobility budget therefore represents neither a saving nor an extra cost for the employer.

Employees benefit from the mobility budget until they exercise a function for which they are no longer entitled to a company car. Furthermore, if an employee is promoted, he or she will benefit from the higher mobility budget, which corresponds to the new function.

5.       (Para)Fiscal treatment

The (para)fiscal regime of the mobility budget can be summarized as follows:


6.        To learn more

Yes, the legislation prohibits a series of accumulations (e.g. with the commuting indemnity or the bicycle indemnity) and provides for some anti-abuse measures (e.g. only one vehicle is eligible)

The legislation also provides that the mobility budget receives the same labour law treatment as the private use of a company car. In this regard, we consider the evaluation when calculating the severance indemnity.

A specific Royal Decree must still be adopted on the management of the mobility budget by employers. The draft Royal Decree was submitted for advice to the State Council.

7.       To do or not to do?

With the favorable (para)fiscal treatment of the first and second pillar, the mobility budget is an interesting new tool for employees and employers who are searching for alternative means of transport, either partially with or without a company car.

Please note that the withholding of 38.07% on the cash “penalizes” the third pillar. The mobility allowance (“cash for car”) benefits from a better (para)fiscal treatment, meaning it remains an alternative for the employees who absolutely do not  want a company car any more.

  Employment, Pensions & Benefits