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Budget Day 2022: Increase tax-free travel allowance to €0.21

September 20, 2022

The aim is to compensate employees for higher fuel and public transportation (ov) costs with this travel reimbursement scheme, according to government documents.

What about travel reimbursement

With higher prices for driving and public transportation (ov), workers have higher travel costs. Employers can reimburse travel expenses tax-free to their employees. That tax-free allowance is therefore going up. When traveling by public transportation, the employer can also reimburse full travel expenses tax-free. Employers do not have to increase travel reimbursement – also known as mileage reimbursement.

Tax-free travel reimbursement (mileage allowance)

The Cabinet proposes to increase the tax-free travel allowance from €0.19 per kilometer to €0.21 per kilometer from Jan. 1, 2023. And to €0.22 per kilometer from Jan. 1, 2024.

“These amounts are for travel expenses while working and for commuting. They apply to salaried employees and to entrepreneurs for income tax purposes (IB entrepreneurs). If an employer reimburses a higher travel allowance, the portion above €0.21 (as of Jan. 1, 2024, €0.22) per kilometer counts as wages. The employer must withhold payroll taxes on this,” the government said.

Prince’s Day

The Tax Plan is announced every year on Budget Day. The plans will then be debated by the House of Representatives and the Senate. By agreement, they usually apply from January 1 of the following year. Read all about Budget Day 2022!