In recent years, there has been some movement in the area of mobility at companies. The trend is moving away from fixed fleets and company cars towards flexible mobility budgets. Particularly in congested cities, where finding a parking space can be nerve-wracking, employees prefer to use other means of transport such as e-scooters, e-bikes, public transport or car-sharing services and therefore a mobility mix.
As a result, more and more mobility options are being added in cities, many of which are summarised under New Mobility. But a lot is also changing in the world of work: increasingly hybrid working models are forcing companies to rethink mobility more and more often. Comprehensive mobility concepts away from the car are becoming necessary. As a result, many companies are now offering their employees mobility budgets as an alternative to company cars. Some large companies, such as SAP or Deutsche Telekom, are already focussing on flexible mobility options instead of the traditional company car.
To date, there is no standardised tax framework for the mobility budget. The tax treatment depends on how and for what it is used. Companies have various options for implementing the mobility budget. They can offer their employees the mobility budget either via the tax-free 50 euro benefit in kind or via the reimbursement principle with receipt recording. Depending on which option you choose, there are different tax implications. A call to the tax office can provide tax clarity.
Monetary advantage also applicable for mobility budget
The following applies to company cars: as soon as they are used privately, a non-cash benefit arises from a tax perspective. Employees must pay tax on this according to the 1 per cent rule or the logbook method. The same applies to a mobility budget that employees use privately. However, employers and employees have a more attractive tax option for utilising the mobility budget. For them, it is worthwhile recognising the mobility budget as a benefit in kind and using mobility budget providers who provide a mobility card.
The advantage of the benefit in kind is that mobility services settled via it are tax-free up to an exemption limit of 50 euros, which means that the tax on the benefit in kind is much lower than the total tax on a corresponding salary payment. However, if the value of the non-cash benefit exceeds the amount of 50 euros, the entire amount must be taxed as a flat-rate cash salary.
As an alternative to non-cash benefits, companies can also grant the mobility budget as a reimbursement with the payslip. To do this, employees must first submit receipts for their travel expenses. This so-called reimbursement principle counts as a cash benefit; payments to employees for journeys by public transport are tax-free for an unlimited period via the possible public transport allowance. Other means of transport, such as car sharing or taxi journeys, are still subject to tax.
Companies have two options for implementing the mobility budget for employees: the mobility card via benefits in kind and the invoice scan with reimbursement. But which of the two solutions is best for companies and employees?
Mobility budget app with invoice scan
Companies have the option of implementing the mobility budget according to the reimbursement principle. With this variant of the mobility budget, employees make advance payments and initially pay for the journeys made. At the end of the month, they record the receipts digitally using the mobility budget app provided by the company and submit them for checking and reimbursement.
Employees can submit their travel expenses by scanning receipts using their smartphone camera, for example, or by uploading the invoice to the relevant app. The app automatically checks the travel receipts for accuracy and eligibility for reimbursement and forwards the data automatically to the company's payroll department. Service providers of these mobility budget apps usually also offer tax-compliant processing of all expenses per employee. At the end of the month, companies receive a collected, tax-optimised data export for their payroll accounting system. Employees are then reimbursed for the costs with their next payslip.
Mobility budget app with mobility card
Via an app, employees receive the mobility budget from their employer directly on a mobility card, which is equivalent to a virtual debit or credit card. With this solution, employees do not have to pay in advance; they receive the credit directly from their employer.
Employees select their mobility service directly in the app or in the app of another mobility service provider and pay with the credit on their mobility card, which they have saved as a payment method in the mobility app.
As with the other option, the provider of the digital mobility budget takes care of tax-optimised payroll accounting.
Mix of mobility budget solutions is effective
A combination of both mobility budget solutions is ideal for companies and employees. This offers employees full flexibility and also covers all use cases. On the one hand, mobility services such as car sharing or ride-hailing up to an amount of 50 euros can be used tax-free via the mobility card. On the other hand, the reimbursement principle allows unlimited tax-free use of public transport thanks to the public transport subsidy.
In recent years, there has been some movement in the area of mobility at companies. The trend is moving away from fixed fleets and company cars towards flexible mobility budgets. Particularly in congested cities, where finding a parking space can be nerve-wracking, employees prefer to use other means of transport such as e-scooters, e-bikes, public transport or car-sharing services and therefore a mobility mix.
As a result, more and more mobility options are being added in cities, many of which are summarised under New Mobility. But a lot is also changing in the world of work: increasingly hybrid working models are forcing companies to rethink mobility more and more often. Comprehensive mobility concepts away from the car are becoming necessary. As a result, many companies are now offering their employees mobility budgets as an alternative to company cars. Some large companies, such as SAP or Deutsche Telekom, are already focussing on flexible mobility options instead of the traditional company car.
To date, there is no standardised tax framework for the mobility budget. The tax treatment depends on how and for what it is used. Companies have various options for implementing the mobility budget. They can offer their employees the mobility budget either via the tax-free 50 euro benefit in kind or via the reimbursement principle with receipt recording. Depending on which option you choose, there are different tax implications. A call to the tax office can provide tax clarity.
Monetary advantage also applicable for mobility budget
The following applies to company cars: as soon as they are used privately, a non-cash benefit arises from a tax perspective. Employees must pay tax on this according to the 1 per cent rule or the logbook method. The same applies to a mobility budget that employees use privately. However, employers and employees have a more attractive tax option for utilising the mobility budget. For them, it is worthwhile recognising the mobility budget as a benefit in kind and using mobility budget providers who provide a mobility card.
The advantage of the benefit in kind is that mobility services settled via it are tax-free up to an exemption limit of 50 euros, which means that the tax on the benefit in kind is much lower than the total tax on a corresponding salary payment. However, if the value of the non-cash benefit exceeds the amount of 50 euros, the entire amount must be taxed as a flat-rate cash salary.
As an alternative to non-cash benefits, companies can also grant the mobility budget as a reimbursement with the payslip. To do this, employees must first submit receipts for their travel expenses. This so-called reimbursement principle counts as a cash benefit; payments to employees for journeys by public transport are tax-free for an unlimited period via the possible public transport allowance. Other means of transport, such as car sharing or taxi journeys, are still subject to tax.
Companies have two options for implementing the mobility budget for employees: the mobility card via benefits in kind and the invoice scan with reimbursement. But which of the two solutions is best for companies and employees?
Mobility budget app with invoice scan
Companies have the option of implementing the mobility budget according to the reimbursement principle. With this variant of the mobility budget, employees make advance payments and initially pay for the journeys made. At the end of the month, they record the receipts digitally using the mobility budget app provided by the company and submit them for checking and reimbursement.
Employees can submit their travel expenses by scanning receipts using their smartphone camera, for example, or by uploading the invoice to the relevant app. The app automatically checks the travel receipts for accuracy and eligibility for reimbursement and forwards the data automatically to the company's payroll department. Service providers of these mobility budget apps usually also offer tax-compliant processing of all expenses per employee. At the end of the month, companies receive a collected, tax-optimised data export for their payroll accounting system. Employees are then reimbursed for the costs with their next payslip.
Mobility budget app with mobility card
Via an app, employees receive the mobility budget from their employer directly on a mobility card, which is equivalent to a virtual debit or credit card. With this solution, employees do not have to pay in advance; they receive the credit directly from their employer.
Employees select their mobility service directly in the app or in the app of another mobility service provider and pay with the credit on their mobility card, which they have saved as a payment method in the mobility app.
As with the other option, the provider of the digital mobility budget takes care of tax-optimised payroll accounting.
Mix of mobility budget solutions is effective
A combination of both mobility budget solutions is ideal for companies and employees. This offers employees full flexibility and also covers all use cases. On the one hand, mobility services such as car sharing or ride-hailing up to an amount of 50 euros can be used tax-free via the mobility card. On the other hand, the reimbursement principle allows unlimited tax-free use of public transport thanks to the public transport subsidy.