It used to be common practice that a company car was an attractive incentive for employees to stay with a company in the long term or to attract new talent. However, given the increasing importance of issues such as sustainability and environmental protection, as well as the change in the world of work due to New Work and hybrid working models, the desire for alternatives is becoming stronger and stronger.
According to an online survey by the job platform StepStone, almost half of the 12,000 respondents specifically look for a sustainable company when considering a job change. About 76 percent of the participants also stated that sustainability should be of great importance to their employer. In terms of mobility, a company car is not attractive, but offers such as the new Deutschlandticket or a company bike are.
One offer that companies can make to their employees that bundles different mobility offers and thus increases flexibility is the mobility budget. This employer subsidy offers employees the opportunity to travel in an environmentally friendly way and to organise their mobility more flexibly. Companies, in turn, can use the mobility budget not only as an alternative to the company car, but also to the traditional salary increase and achieve net wage optimisation thanks to tax advantages.
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A mobility budget is a flexible monthly mobility allowance that employers and companies can provide to their employees. It is used to cover the costs of different types of mobility, including public transport, car sharing services, e-scooters, taxi rides and more. Employees can use this budget according to their individual needs.
The mobility budget is part of the new mobility that is already changing the way we get around. Tax regulations must also be observed for these new mobility offers, not least if employers want to make them available to their employees. In addition to a flexible mobility budget, this also includes the provision of an e-bike as part of a bike lease or a travel allowance or the provision of a job ticket.
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The classic salary increase is not always attractive; after all, it also includes taxes and social security contributions. A mobility budget, on the other hand, is an ideal way to offer employees a salary extra that goes beyond the usual increases and with which employees can benefit from a net salary optimisation.
The mobility budget functions as a tax-free or flat-rate taxed wage component that is used in the form of a benefit in kind and ensures net wage optimisation through the tax advantages.
It allows employees to use their monthly mobility budget to choose different modes of transport. This includes public transport, car sharing services, e-scooters and more.
Employers can offer the mobility budget as an employer allowance in addition to salary. Traditional salary adjustments result in tax and social security contributions. With this mobility allowance, employers can provide their employees with an allowance that is tax-free. By using tax-free benefits as a salary extra, the effectiveness of the measure can be significantly increased, which in the end leaves more net for the employee and at the same time results in lower costs for companies. This is made possible by the non-cash benefit, through which companies can give their employees non-cash benefits up to an amount of 50 euros tax-free.
Not least because of this, the mobility budget is an ideal measure for employee retention and recruitment. The mobility budget is an effective means for companies to reduce wage costs and optimise net wages.
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With the mobility budget, companies can benefit from tax advantages with an employer contribution. The non-cash benefit option allows companies to deduct salary increases for mobility budgets from their taxes and thus achieve financial benefits. Benefits in kind to employees are tax-free up to a monthly amount of 50 euros.
Both employers and employees can benefit from tax advantages with a mobility budget. For example, employers can save on non-wage labour costs with an employee allowance compared to a salary increase.
Journeys by public transport are tax-free and the use of bicycles is also tax-privileged. In this way, companies can promote the use of sustainable mobility and reduce costs at the same time.
Providing mobility budgets as an alternative to salary increases or deferred compensation can make your company more competitive while increasing employee satisfaction. The mobility budget is an innovative employee benefit that offers flexibility, sustainability and financial advantages for both companies and employees.
To achieve the best results, it is advisable to seek professional advice and ensure that all legal requirements are met.
At NAVIT, we specialise in mobility solutions and can advise you on how best to integrate mobility budgets into your organisation. Contact us to learn more and shape the future of employee mobility.
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