The Mobility Budget: A Sustainable Alternative to the Company Car

Le mobility budget is a scheme set up to offer employees an alternative to the traditional company car. It aims to encourage more sustainable mobility solutions tailored to employees' individual needs, while reducing the environmental impact of business transport.

This budget is granted by the employer in exchange for the employee giving up his company car or the possibility of benefiting from it. It can be used flexibly, according to the employee's preferences and the options offered by the company, in the following ways three distinct pillars.

The three pillars of the Mobility Budget

1. An environmentally-friendly car

Workers can use their budget to finance a more environmentally-friendly car, which must meet specific CO₂ emission criteria. Generally, this concerns:

• The electric vehicles or rechargeable hybrids with sufficient electric range.
• The cars with very low CO₂ emissionswhich comply with the environmental standards defined by current legislation.

This option allows employees to retain a degree of flexibility while reducing their ecological impact.

2. Sustainable Mobility Solutions

Part or all of the budget can be allocated to alternative modes of transport more sustainable and environmentally friendly. Eligible solutions include :

• Public transport subscription to a bus, train, metro or tram network.
• The bike buying or hiring a bike (electric or conventional), or a bike-sharing service.
• Car sharing Carpooling: financing the costs associated with carpooling as a passenger or driver.
• Scooters and other means of micro-mobility Some companies include the hire of shared electric scooters.
• Soft mobility costs Infrastructure to encourage walking and cycling, such as secure car parks and changing rooms with showers.

This approach makes it possible to diversify modes of transport, reduce road congestion and encourage more responsible mobility.

3. A Cash Payment of the Remaining Balance

If there is still a balance available after the first two pillars have been used up, this can be paid directly to the employee in the form of a salary supplement.

This amount generally benefits from a advantageous tax treatmentThese are subject to a reduced rate of tax and, under certain conditions, are exempt from social security contributions. However, this tax advantage may vary depending on the legislation in force in each country.

Impact of the Mobility Budget on Travel Expenses

As soon as the mobility budget is granted, the employer is no longer obliged to pay a travel allowance to the employee, regardless of the means of transport used (private car, public transport, bicycle, etc.).

This means that if employees opt for an alternative mobility solution within their budget, they will no longer be able to claim reimbursement of their transport costs from their employer.

Please note: No accumulation possible

It is important to note that if the employer nevertheless decides to reimburse travel expenses in addition to the mobility budget, these amounts will be considered as taxable remuneration.

This can lead to :

• A increased tax and social security charges for the employer.
• A reduction in tax benefits for the employee, who would see this sum subject to income tax and social security contributions.

It is therefore essential to understand the tax and legal implications before opting for this solution.

Advantages and constraints of the Mobility Budget

Advantages

✔ Flexibility Every employee can choose the mobility solutions that suit them best.
✔ Reduced environmental impact sustainable transport and limiting CO₂ emissions.
✔ Financial optimisation : the possibility of benefiting from a favourable tax regime.
✔ Improving quality of life Reduced stress linked to traffic jams, access to more appropriate solutions.

Constraints

✖ Abolition of travel allowances potential loss of a benefit for employees using their personal vehicle.
✖ Availability of options The mobility offer depends on the employer's choices and local infrastructures.
✖ Administrative complexity The need for good budget management and compliance with tax rules.

Conclusion

The mobility budget represents an interesting and sustainable alternative to the company car, as part of a more ecological and flexible approach for employees. It encourages the use of public transport, soft mobility and clean vehicles, while offering an advantageous tax framework.

However, adopting the new system will require changes to be made to travel expense reimbursement practices and rules. It is therefore essential for employers and employees to fully understand how it works and its implications before making an informed choice.