In an increasingly networked and flexible working world, supporting employees with their mobility is becoming more and more important. Many people have also fundamentally changed their mobility behaviour in recent years. However, employers who want to support their employees with their mobility are confronted with various concepts and financial support options. Choosing the right instrument for the different mobility needs of employees requires HR managers to spend a lot of time researching the right information.
We relieve HR of this time-consuming task and explain the various terms mobility budget, mobility allowance, mobility lump sum and mobility bonus. What exactly is behind these terms and what are the differences between them?
More and more people are looking for flexible and sustainable mobility options, especially for commuting to work, where mobility behaviour has changed significantly due to hybrid working and flexible working models. Employers have the opportunity to respond specifically to this change in behaviour by offering employees a mobility budget and also offer their employees an attractive benefit.
With the mobility budget, employees receive a monthly budget from their employer, which they can use to freely choose the means of transport for their business or private journeys, such as bus, train, e-bike, taxi or even car sharing.
The mobility budget is intended to give employees flexible access to all modes of transport. Employers should note that taxation is regulated differently depending on the mode of transport. For example, if tickets for public transport are purchased with the budget, these are generally tax-free, while the use of other mobility services such as car sharing, Uber and taxis are taxed. The decisive factor here is how the mobility budget is offered and billed by the company, how high the monthly amount is and whether the budget is granted instead of the salary or in addition. Employers can, for example, make use of the non-cash benefit, which provides for a tax-free limit of 50 euros for a mobility budget.
If companies want to introduce a mobility budget for employees, the easiest way to manage this is via a comprehensive mobility platform or software solution. A large number of mobility budget providers have now developed corresponding solutions. Platforms such as NAVIT, for example, bundle access to all mobility offers and help companies to save administrative effort, time and costs.
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The term mobility allowance (Mobilitätszuschuss) is often used synonymously with the popular travel allowance (Fahrtkostenzuschuss). The travel allowance is a salary supplement that employers can grant their employees for travelling to work - regardless of which means of transport they choose. An amount of EUR 0.30 per kilometre is paid for the one-way journey between home and work and only for the days on which employees are at work.
The travel allowance is a popular employer subsidy that is tax-free for employees and is therefore particularly suitable as an employee retention tool for employees who live further away from the office. The flat-rate wage tax of 15 per cent for travel allowances granted is paid by the employer. Employees thus receive a net wage optimisation.
It should be noted that this mobility allowance can only be paid to employees who regularly commute to work. If employees work from home every day, they cannot receive a travel allowance. If employees come to the office for two days a week, for example, they can only receive the allowance for these two days.
In many cases, there is an annual upper limit of 4,500 euros for travel allowances granted (same upper limit as for income-related expenses). In addition, if employers grant their employees a travel allowance, they can no longer claim these costs as income-related expenses in their tax return.
The terms mobility lump sum (Mobilitätspauschale) and mobility bonus (Mobilitätsprämie) refer to the same financial support. With the mobility lump sum or mobility bonus, employers pay a flat-rate monthly amount to their employees. As not all commuters benefit from the increase in the commuting allowance, this lump sum was also introduced in 2021 - initially until 2030 - as part of the Act on the Implementation of the 2030 Climate Protection Programme.
It is primarily intended for commuters whose taxable income is below the basic tax-free allowance. This is because no income tax is payable on income below the basic tax-free allowance, meaning that low-income earners cannot benefit from the increase in the commuting allowance in their income tax return. In 2024, the basic tax-free allowance will be €11,604 per year. The Federal Ministry of Finance estimates that around 250,000 commuters are below the basic allowance and can therefore apply for the mobility allowance.
Like the commuter allowance, the mobility bonus is aimed at long-distance commuters, as employees can only make use of this allowance if the first place of work is more than 21 kilometres away from their home.
Owning a private vehicle is not a prerequisite for the mobility bonus. This distinguishes the mobility allowance from the existing car allowance, which requires employees to have a private vehicle. They use this for business trips, for example, and are therefore not entitled to a company car. A logbook must be kept in order to receive the car allowance. In contrast, the mobility allowance can be used very individually. Employees only have to prove that they are always mobile when travelling on business.
It does not matter whether they are travelling in their own vehicle or using car sharing. Employees can also use other means of transport, such as the train, bus or e-bike. Employees can decide for themselves how they want to be mobile.
Employers can handle the mobility bonus in different ways. For example, they have the option of paying a kilometre allowance as a tax-free reimbursement of expenses for business trips actually made. However, this process usually involves additional administrative work, which is why many companies do not make use of it. Instead, they set the mobility allowance at such a high level that all mobility costs are covered as far as possible.
A mobility bonus as an alternative to a company car can be worthwhile from a tax perspective for many employers and employees. In the tax return, there is an annual allowance of 1,000 euros for the mobility bonus from the employer. However, only the amount of money above this, taking into account the commuting allowance, is calculated. In addition, the basic allowance for income-related expenses is also taken into account. This means that the mobility allowance cannot be refunded twice for tax purposes. Only the amount that remains after these calculations is refunded as a 14 per cent mobility allowance for tax purposes. The mobility allowance is worthwhile for low-income earners and trainees, as they cannot usually claim the commuting allowance. However, the mobility bonus is also aimed at frequent travellers who do not pay tax because their annual income is below the basic tax-free allowance.
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At a time when the way people work and commute is changing rapidly, innovative approaches to promoting mobility are crucial for companies. The terms "mobility budget", "mobility allowance", "mobility lump sum" and "mobility bonus" represent different tools available to employers to support their employees' mobility.
The mobility budget gives employees the opportunity to choose flexibly between different modes of transport, be it public transport, cycling or car sharing. It is true that the tax treatment depends on the individual arrangements made by the company, as well as the mobility behaviour of the employees. Nevertheless, it is clear that a mobility budget for employees is the most democratic benefit, as all employees can benefit from it.
The mobility allowance, also known as a travel allowance, offers a tax-free way of remunerating employees for their journey to work. The travel allowance offers significant tax advantages, particularly for commuters who travel to work by bus and train, making this allowance an attractive tool for employee retention.
The mobility lump sum or mobility bonus, on the other hand, is a lump-sum financial support that particularly benefits low-income earners and long-distance commuters.
Companies interested in implementing these financial subsidies for employee mobility can rely on modern platforms and software solutions to minimise the administrative effort and offer employees smooth access to all mobility options.
Overall, these tools not only enable targeted support for employees, but also help to promote sustainable and flexible mobility. A smart selection and integration of these tools into the corporate culture can therefore not only increase employee satisfaction, but also make a positive contribution to the company's environmental responsibility.
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