Compensation employees' professional mileage: the maximum amount of compensation has decreased

01 Jul 2016

As from 1 July 2016, the maximum amount of the fixed mileage compensation is set at 0.3363 EUR per kilometer.  This is a decrease of the amount, which was 0.3412 until 30 June 2016.

This fixed amount can be granted to an employee who uses his own vehicle (car, motorcycle or moped) to travel for his employer. For tax purposes, travel between the place of residence and the fixed place of employment cannot be considered as a professional travel and hence cannot be regarded as "travel on behalf of the employer".

From a tax perspective, this mileage compensation is considered as a non-taxable reimbursement of costs proper to the employer.

In the event the employer would grant a higher compensation, the difference will possibly be regarded upon as a taxable advantage.

From a social security perspective, this payment by the employer is not regarded as remuneration since it is a cost proper to the employer. Therefore, it is exempted from social security contributions. As a rule, the National Social Security Office takes the same amounts into account as those foreseen by tax legislation.

The new amount applies from 1 July 2016 until 30 June 2017.

> Action point

When granting the professional mileage compensations, you will have to take into account, as of 1 July 2016, the new amount of mileage compensation: 0.3363 EUR per kilometer.