The mobility budget, which was introduced in 2019, is increasingly being offered by employers as an alternative to the company car. From 1 January 2022, a number of legislative adjustments were also made to make the mobility budget more attractive.

One of the announced adjustments was a simplified way to calculate the mobility budget via a formula. For the calculation, reference is made to the 'total cost of ownership' or TCO of the car to which the employee is entitled. This formula was not yet included in the legislation, but had to be introduced by royal decree. That decision with the formula took a long time, but has now been published, 21 months later. The adjustments will take effect from 1 January 2024.

Mobility budget

Since the changes to the legislation in 2022, the mobility budget has gained popularity after a slow start. Employers use the mobility budget to make the salary and the mobility package more attractive in the war for talent.

Through the mobility budget, an employee can choose to exchange the company car or to choose a more environmentally friendly car within pillar 1 if the employer provides this. With that budget, the employee can then opt for alternative mobility in pillar 2. These expenses are then completely exempt from taxes and social security. For example, an employee can choose to buy a bicycle for the whole family, purchase a train season ticket, or, provided certain conditions are met, have their housing costs reimbursed. Is there a balance left at the end of the calendar year? Then this is paid through the 3rd pillar, after deduction of 38.07% social security contribution. No taxes are due on this amount, which gives a nice result for the employee.


Cash amount (without mobility budget)

Mobility budget

Full amount in cash

in 3rd pillar

Mobility budget

Part spent in 2nd pillar + residual balance 3rd pillar

Mobility budget

Full spending in 2nd pillar

Amount of mobility budget

7.200,00 EUR

7.200,00 EUR

7.200,00 EUR

7.200,00 EUR

Repayment loan


- 7.200 EUR

Budget alternative mobility


- 3.000,00 EUR

- 0 EUR



4.200 EUR


social security

- 4.289.59 EUR

-2.741,04 EUR

- 1.598,94 EUR

- 0 EUR


2.910.42 EUR

4.458,96 EUR

2.601,06 EUR



2.910.42 EUR

4.458.96 EUR

5.601,06 EUR

7.200 EUR


Determination of the budget

In principle, the total mobility budget must correspond to the total cost of the car, the so-called 'total cost of ownership'. This is not only the cost of the car itself, but also, for example, the rejected expenses in corporation tax, insurance, non-recoverable VAT, and so on.

For many employers, it was administratively complex and not easy to determine this cost. In practice, many employers equate the mobility budget with the (often already existing) car budgets. However, the car budgets do not always correspond to the total cost of the car for the company.

The 2022 legislation stipulated that the amount of the mobility budget, or TCO, can be calculated:

  • on the basis of actual costs, or
  • can be calculated on the basis of flat-rate values.

From the recently published Royal Decree of 10 September 2023, these formulas have now been included. Interesting here is that the calculation method can be applied both for the calculation of the amount of the mobility budget itself, but also for the charging of the pillar 1 car cost. 

The actual cost formula

For this formula, the Royal Decree provides an exhaustive list of costs that can be included in the calculation. Other costs, such as traffic fines, are not included in this list and are therefore not allowed.

In addition, the company car policy with the employer must determine whether the costs actually apply. If the costs are not included in the company car policy, they cannot be charged. For example, the costs of a replacement car may not be taken into account in this cost calculation if they are in principle not paid by the employer/are not included in the lease.

Below is the list mentioned in the Royal Decree:

  • costs of rent or leasing; or
  • in case of purchase, the annual depreciation of 20 p.c. of the cost price of the environmentally friendly company car, taking into account the options and accessories charged and the discounts granted;

Plus any additional costs (if not already included in the lease price):

  • interest on borrowed capital;
  • fuel and electricity costs;
  • administration costs related to fuel and charging cards;
  • annual depreciation of 20 p.c. of the cost price of the charging station and its installation (if not included in the lease amount of the car);
  • maintenance and repair costs of the charging station;
  • management costs of the charging station and charging cable;
  • tolls and parking costs;
  • cleaning, maintenance and repair costs;
  • cost of a replacement car;
  • costs for making the vehicle roadworthy;
  • costs for replacing, changing and storing the tires;
  • expertise costs in the event of the return of the vehicle at the end of the contract or in the event of a change of driver;
  • repair costs inventoried when returning the vehicle at the end of the contract;
  • insurance costs (incl. franchise costs);
  • costs of the roadworthiness test;
  • management costs of services;
  • tax on entry into service;
  • traffic tax;
  • employer's CO2 solidarity contribution for the benefit of the NSSO;
  • non-recoverable VAT on the above cost items;
  • tax on the non-deductible portion of the above items;
  • tax on that part of the benefit in kind constituting a rejected expenditure.


When calculating the amount of the mobility budget, the average of this cost over the last four years (or less if the traded-in car runs for less than four years) should be taken into account so that any exceptional costs are evened out. This condition is not imposed for the cost calculation of the Pillar 1 car, as this will of course be a new car.

The new flat-rate cost formula

The flat rate is mainly an aid in determining the average consumption cost of the car. Where in practice an average of the kilometers and refueling/charging costs over a year or number of years was often taken to determine the cost, a formula is now provided.

Lease or rent

Annual rent/lease cost + average annual additional costs that are not included in the rental or lease contract but are stated in the company car policy

+ Non-deductible VAT + tax on non-deductible car costs + CO2 solidarity contribution

+ the consumption cost (provided that the employee has a fuel card/charge card and these costs are not yet included in the lease price):

  • 6000 private kilometers
  • Commuting distance round trip during 200 working days
  • Multiplied by the consumption cost per kilometer set at 30% of the flat-rate kilometer allowance applicable at that time

from 1/7/2023 until 30/9/2023 = 0.4237 EUR à 30% of this = 0,127 EUR/km


Example in terms of kilometers with a commuting distance of 25 kilometers (single)

6.000 + (25 x 2 x 200) x 0.127 = 2.032 EUR consumption cost per year

Ownership or finance lease

Catalogue value of vehicle incl. taxes on non-deductible part x 25 %

+ CO2 solidarity contribution

+ consumption costs as explained above

It is important to mention that the costs of a pillar 1 car are charged annually. This means that the costs can fluctuate annually, for example if the employee moves (changed commuting distance) or if the fixed mileage amount is adjusted.

If the flat-rate method is used in the composition of the mobility budget, the consumption cost may be based on the amount as known at the entry by the employee, and this also remains unchanged over the years. In this case, a change in the flat-rate mileage allowance does not lead to an increase/decrease in the flat-rate consumption cost, whereas this is the case with the Pillar 1 car.

This is also the 'go-to formula' when there is no car yet, such as for an employee who is newly employed or in the case of a promotion where the employee has already entered the mobility budget and they merely acquire the right to a bigger car (and therefore also an increase in the mobility budget) without actually ordering a car. 

How to apply?

The purpose of the flat-rate option, especially with regard to the cost of the Pillar 1 car, is twofold. On the one hand, it is intended to reduce the administrative burden on employers. On the other hand, it offers employees more clarity and certainty, because with the flat-rate calculation method they can immediately see how much money they may still have available for expenditure in the various pillars.

Employers have the freedom to choose which method to use, as long as it is applied consistently for all employees and clear communication takes place. For example, an employer can choose to use the actual cost calculation for the mobility budget, while applying the flat-rate calculation for the Pillar 1 car.

The chosen calculation method must remain applied for at least three years. However, if the employer decides to change the calculation method after this period (e.g. from actual to flat-rate), this will only affect new entrants in order to safeguard legal certainty for existing users.

In addition, it is explicitly stated that the formulas do not prevent the employer from applying a system of reference cars.

Although the law is in principle based on a calculation per individual employee (based on the effectively chosen car and consumption), it has long been allowed for the employer to determine the mobility budget on the basis of a reference car linked to the job category. In this way too, a lot of administrative complexity and differences between employees are avoided. This is also the system that most employers, who have already introduced a mobility budget, apply.

Conclusion and points of attention

With the introduction of the optional formula, another major obstacle has been removed and the mobility budget will undoubtedly become even more popular.

However, employers who are eager to use the flat-rate formula should think before they start. First and foremost, it must be examined whether the mobility budget with the use of the formula is still budget neutral. For example, you may have to allocate a different budget to your employees after applying the formula.

Many employers prefer to allocate as much as possible one and the same budget within a certain car category. With the application of the formula, one may have to individualize more and deviate from the car budgets that are currently allocated. In addition, as a company you naturally want to avoid that employees who opt for the mobility budget are disadvantaged or favored because the mobility budget deviates from the standard car budget.