Mobility allowance: a closer look at the cash-for-car scheme

Although the car still offers many advantages (especially if you hold a MAES fuel card and therefore refuel cheaply), this classic means of transport is gradually losing popularity. And that is not surprising. The traffic congestion is increasing and alternatives such as sharing bicycles and electric steps or even Ubers are becoming increasingly attractive. The government is responding to this with initiatives such as the mobility budget and the mobility allowance. Here we explain the differences and highlight the mobility allowance, which is also referred to as the “cash for car” scheme.

Mobility budget or mobility allowance?

Although the two systems are sometimes confused and indeed have many similarities, you cannot just equalize the mobility budget and the mobility allowance. The mobility budget allows employees to trade in their company car for a more sustainable copy, while employees who hand in their company car and opt for a mobility allowance permanently give up a company car. They receive cash compensation in exchange.

If you switch from a mobility allowance to a mobility budget, you naturally lose your right to a mobility allowance – and vice versa.

The size of your mobility allowance

How much cash you get in exchange for your company car depends on a number of parameters. The mobility allowance is calculated using a formula that takes into account, among other things, the catalog value of the company car you return, the extra options, the employee’s own employee contribution, and whether or not you have a fuel card. Namely:

• 20% of 6/7 of the catalog value (minus any personal contribution to the car costs) if you did not have a fuel card.
• 24% of 6/7 of the catalog value (minus any personal contribution to the car costs) if you did have a fuel card.

The amount resulting from this is still taxed, but as an employee you do not pay social security contributions. The mobility allowance can also rise or fall with a promotion or a job change (for which you as an employee would be entitled to a company car from a higher or a lower category).