Tax-Free Commuter Allowances Ended December 31^st 2021 In The Netherlands

Updated March 2023

Tax-free, fixed commuter allowances approved before March 13th, 2020 have been extended multiple times by the Dutch government. For some, they represented welcome additional compensation even when expenses were no longer incurred for commuting as a result of home working.

Since January 1st, 2022 however, Dutch employers can no longer pay their employees fixed commuter allowances tax-free. From that date on, they can only provide a tax-free reimbursement for the actual travel distance to and from work for a maximum of € 0.19/km in 2022 and € 0.21/km in 2023. This amount may be increased to € 0.23/km in 2024.

Commuter allowance vs. mileage claim

Over the past year, employers could choose to keep paying their employees fixed commuter allowances even as home work became the norm.

However, because of this shift in working norms many employers have stopped paying these allowances. Employees no longer commuting to work daily are not incurring costs and thus don’t need a commuter allowance.

Today, many organisations choose to compensate their employees based on mileage claims rather than a fixed rate.

What's next for Dutch commuters?

After December 31st 2021, employees have no longer received tax-free, fixed commuter allowances when working from home. This change applied to both employees using their own vehicle and those using public transport. Employees will have to pay taxes on any amounts received above the expenses incurred.

To keep paying a fixed commuter allowance, employers must demonstrate that their employees commute at least 128 days per year to a given workplace. Currently, most employees are no longer commuting to work daily meaning they do not fall within this condition.

If employers cannot show that employees are commuting the required minimum to a fixed workplace, there are two options:

• Keep paying the fixed commuter allowance, knowing it will be taxed as part of the employee’s salary.
• Compensate the employee based on expense or mileage claims submitted for each trip.

The second solution will avoid unpleasant surprises on the employee's payslip, but does come with a tracking requirements for the number of days and kilometers travelled.

Is there a home working allowance?

Since 2022, the Dutch government has instituted a home working allowance to cover the additional daily costs of working from home. In 2023, that allowance is of €2.15 per day.

NB: A home working allowance and mileage allowance cannot be claimed for the same day. However, employers and employees can make fixed agreements regarding the number of home working days to avoid employees having to track these separately.

Alternatively, organisations can compensate employees working from home by covering the costs of their equipment, internet connection or mobile subscription following the existing WKR regulations.

How Mobilexpense ensures allowance compliance

Mobilexpense proactively researches any changes in regulations and updates them in the solution. This means that Mobilexpense customers with entities in the Netherlands do not have to do anything to be compliant with the new rules. We take care of the updates for them.

Until December 31st, 2021, fixed allowances fell under the "old" rule and were tax-free. Since then, Mobilexpense has ensured appropriate tax deductions for employees still receiving a fixed commuter allowance.

And as always, employees who submit expense claims are reimbursed seamlessly via the system. We ensure that claims of any kind remain carefree for both organisations and their employees.