Mobility budget solutions in practice 2023 - different approaches compared

Summary

  • Key points: Mobility budgets are considered the ideal flexible employee benefit for sustainable mobility.

    Increasingly, companies favor to provide their teams with mobility budgets over other mobility benefits.

    In doing so, organizations can choose from a variety of solutions for implementing a mobility budget.

  • 'Ticket Reimbursement' solution. Your employees first pay in advance and have the ticket costs reimbursed by you.

  • 'Mobility Budget Provider App' solution. Your employees book and pay for their journeys via an app of the mobility budget provider. However, the offer is usually limited to a few mobility service providers.

  • 'Prepaid Card' solution. With a mobility budget card, your employees pay directly with their credit at any available mobility service provider.

Mix of solutions. A mix of solutions is optimal for your company and your employees. This offers your team full flexibility and covers all use cases.

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Mobility Budget: The Flexible Employee Benefit

The world of work is changing and with it the needs and wishes of employees.

Many companies and employees are concerned about climate change, and they want to do something about it.

Especially in the area of transport. The days of large company cars as a status symbol are over .

For most young professionals, the company car is no longer attractive, and many young people in the big cities do not have a driver's license anyway. Instead, they want more flexibility in their choice of transport and environmentally friendly alternatives to the company car.

In addition, hybrid working and mobile workplaces pose new challenges for mobility in everyday working life.

A mobility budget is the ideal solution to meet all these requirements.

It allows easy access to all means of transport and thus offers your employees full flexibility.

For commuters with long commutes and employees with short commutes, the mobility budget offers the optimal mix of mobility services to get to the office or to the next appointment on time and stress-free.

Last but not least, many companies want or need to reduce their CO2 emissions. This also applies in particular to the area of mobility.

In order to create incentives for your team to use more sustainable forms of mobility, as a company you can offer your employees mobility budgets as part of the tax-free non-cash benefits . As a modern employee benefit, you give your employees a monthly credit instead of the classic company car, which they can use for their work and private travel.

At the same time, your company benefits in different ways from the introduction of a mobility budget as an employee benefit.

Switching from company cars to mobility budgets makes your company's fleet smaller, which results in significant cost savings.

If your team uses public transport, this means tax benefits. Tickets for public transport are exempt from tax. In addition, by introducing a mobility budget, your employees get the full flexibility they want and complete access to sustainable mobility. In this way, you promote employee motivation and the work-life balance of your employees.

As an employer, are you considering introducing a mobility budget for your employees?

Different solutions to implement a mobility budget

We clarify which forms of mobility budgets are currently on the market and shed light on the respective handling and billing of the individual mobility solutions.

There are currently two ways to implement a mobility budget: The platform model and the prepaid card, whereby the platform model can be differentiated into two use cases.

With the first model, your employees pay in advance and scan the ticket or the invoice of the mobility service in order to be reimbursed afterwards.

In the second model, your employees book and pay directly in the app of the mobility budget provider with the credit available there.

1) Platform model

  • Scan public transport ticket or invoice from mobility service and have amount refunded
  • Ticket purchase and booking of mobility services directly in the app

2) Prepaid card

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Model 1: Scan public transport tickets or invoices from mobility service providers and have the amount reimbursed

Your employees first make an advance payment by buying the public transport tickets themselves or paying for the booking of mobility services via the mobility providers out of their own pockets.

They scan the public transport ticket or the invoice of the mobility service via their own app and have the amount reimbursed.

The app creates a reimbursement file based on the employee's tax-optimized travel expenses and uploads it to your payroll system so that the expenses incurred are reimbursed with the monthly salary.

An integrated tax algorithm optimizes the expenses incurred by your employees.

Journeys from home to work that are made using public transport are tax-free. The same applies to private journeys by public transport, which you subsidize as an employer.

Model 2: Ticket purchase and booking of mobility services directly in the app

The route planning, booking, and payment of the mobility services take place directly via the app of the mobility budget provider.

You provide the mobility budget directly in their app and use it to pay for the mobility services.

Compared to the first model, this is definitely done cashless and digitally.

As a company, you pay out the mobility budget directly to your employees in the form of an app credit.

Your employees do not have to pay in advance. With the settlement via the app of the mobility budget provider, the receipts are automatically sent to you as the employer.

Model 3: Prepaid card (mobility budget card)

Your employees receive a mobility budget card that has been loaded with predefined credit by you.

With the mobility budget card, your employees pay directly to the mobility provider - cashless and digitally.

Cash cannot be withdrawn with the card. The card is used solely for booking and paying for mobility services.

The mobility services are treated as remuneration in kind. For your company, these cards are worthwhile in that the "tax on benefits in kind" corresponds to a significantly lower overall taxation than a salary payment.

For your employees, the non-cash benefit is more attractive from a tax point of view than payment with the salary. An integrated algorithm maps the mobility expenses including their taxation.

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Stefan Wendering
Stefan is a freelance author and editor at NAVIT. Previously, he worked for startups and in the mobility sphere. He is an expert in urban and sustainable mobility, employee benefits, and New Work. In addition to creating blog content, he also produces marketing materials, taglines, and website content, as well as case studies.
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