Many companies provide the option of returning the company car, as not all employees have a role that requires a company car and mobile flexibility. Until recently, this was possible via the cash-for-car system. This system was introduced by many companies, but was overturned earlier this year by the Constitutional Court.

The question at present is what alternatives a company has now that the cash-for-car legislation has been annulled. We illustrate this with an example.

Comparison: what is the net result?

Koen traded in his BMW 3 last year for a mobility allowance (catalogue value of EUR 40,000). He received a gross compensation of EUR 8,228.57, which came to a net compensation of EUR 7,542 on an annual basis or EUR 628,50 per month.

Until 31 December 2020, Koen could benefit from the cash-for-car system. After that, his employer had to propose an alternative, unless the government comes up with one, which seemed unlikely.

Alternative 1: Opting for a cash payment

The cash payment can of course continue, but the advantageous (para)fiscal assessment will no longer apply. Koen will therefore only receive a net remuneration of EUR 2,619 on an annual basis after 1 January 2021 (compared to EUR 7,542 previously).


The remuneration is fully subject to social security (employer and employee) and taxes. Koen receives only one third of what he used to and the amount is not at all in proportion to the value of the car he received.


For the employer, this is obviously the easiest solution. For the employee, it may also be a better alternative than opting for a leased car (see below).

Alternative 2: Opting for a company car (again)

The legislation on mobility allowances already allowed switching back to a company car. Of course, this is certainly possible now too, since the law has been repealed.


The employee may not need this car, as he/she may have originally chosen cash-for car-for a good reason.

We noticed, in practice, that many new employees chose cash-for-car because they already had a car, or because they live in a city with few parking facilities.


From a fiscal point of view, the company car scenario is obviously the most interesting option. The value of a car is difficult to estimate, but it is certain that the cost of a car (including insurance, maintenance, fuel costs, etc.) normally exceeds the mobility allowance. It depends on the circumstances, of course.

Alternative 3: Include in a cafeteria plan?

Organizations can choose to include the budget in a cafeteria plan and allow the employee to exchange the budget for other benefits available in the cafeteria plan.

These can be different mobility solutions, e.g. bicycle leasing, public transport, etc., or other benefits such as multimedia, insurance or extra holidays, among others.


The budget created by handing in a car is often very large. Suppose the cost of the car (TCO) here was EUR 8,400 on an annual basis. If a cafeteria plan already exists with the option of budget creation (e.g. via the thirteenth month), the employee will probably always have to pay a large amount in cash. And then we are again in the least interesting scheme: compensation via cash.


This option offers flexibility to the employee, especially if a wide range of alternative mobility solutions are already included in the cafeteria plan. Potentially, this can also be an interesting tax story.

Budget for returning car: EUR 8,400

  • Choice of subscription: EUR -2,000
  • Choice of bicycle leasing: EUR -1,000
  • Option for shared bicycles: EUR -200
  • Choice of multimedia: EUR -1,000
  • Choice of outpatient/dental insurance: EUR -400 

Balance in cash: EUR 3,800 (net EUR 1,209.50 )

This option leads to a total net remuneration of EUR 5,809.50 on an annual basis (compared to EUR 7542 previously), excluding VVA  on multimedia and rejected expenses insurance. If the employee does not want to/cannot opt for alternative mobility, this obviously makes the cafeteria plan alternative much less interesting.

Alternative 4: The mobility budget?

First and foremost, the mobility budget is a great idea in itself and is well structured. However, if you take a closer look at the legislation and dare to read the mobility budget FAQ ( in its entirety, you'll quickly lose track.

How you introduce the mobility budget as an employer, however, is up to you. Lately, we have been introducing more and more a “mobility budget light” to our customers, i.e. only the basics.


The mobility budget is relatively complex to implement. An employee cannot choose other elements in the cafeteria plan, such as multimedia. The cash amount is paid out only once a year.


In addition to the various alternative forms of mobility that an organization can offer, there is a wide range of additional elements, such as tickets abroad for the whole family for private purposes. The cash balance is taxed in an advantageous way (only withholding a contribution of 38.07%).

So, suppose an employee wants to pay out the whole budget in cash, the net allowance will be EUR 5,202.12. This amount will increase if part of this budget is also spent on alternative mobility, making this system more interesting than the cafeteria plan.

Cash for car


There is no ready-made answer as to which alternative is the best. The magic word is flexibility, so it is best to let the employee choose. In the long run, the mobility budget will be the most sustainable solution, but legislation must be adapted to simplify the system and remove some of its loopholes.

For the time being, we therefore recommend the introduction of a “light” mobility budget, provided it is implemented properly (with a clear policy and taking into account all the strict regulations in the legislation) in combination with a cafeteria plan (which also includes a downgrade of the company car and further flexibility in the car policy).