Tax-free, fixed commuter allowances approved before March 13th, 2020 have been extended multiple times by the Dutch government. For some, they represent welcome additional compensation even when expenses are no longer incurred for commuting as a result of home working. But they are coming to an end due to the Covid-19 crisis.
As of October 1st, 2021, Dutch employers can no longer pay their employees fixed commuter allowances tax-free. Meaning employees who receive a fixed commuter allowance on home working days will have to pay taxes on it as part of their salary.
Over the past year, employers could choose to keep paying their employees 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 compensate their employees based on mileage claims rather than a fixed rate.
After October 1st, employees will no longer receive tax-free, fixed commuter allowances if they are working from home. This change applies to both employees using their own vehicle and those using public transport. They will have to pay taxes on any amounts they receive 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.
At initial publication date, it appeared that there will not be a tax-free home working allowance in the near future.
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.
MobileXpense proactively researches any changes in regulations and updates them in the system. 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 October 1st, fixed allowances fall under the "old" rule and are tax-free. As of then, MobileXpense will ensure 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.
Talk to an expert and find out how MobileXpense can help you ensure compliant allowances and expenses.