Travel allowance is compensation you receive for the costs you incur for commuting or business trips. This allowance helps to cover the costs of using your own car, public transport or bicycle, for example. Many employers offer a travel allowance to alleviate their employees’ expenses. The allowance can vary depending on the distance you travel and the means of transport you use. In 2024, it is important to know what schemes are in place and which tax rules apply. That way, as an employee or employer, you can take full advantage of the opportunities.
Origins
Travel allowance has its origins in the growing need to financially assist employees with their daily travel expenses. The concept emerged as more and more people moved further away from their work, resulting in higher travel costs. In the Netherlands, travel allowance became increasingly popular in the 1960s and 1970s, partly due to the increase in commuting. The government and employers felt it was important to partially compensate for these costs so that working remotely would become more attractive. It has since become a well-established scheme used by many employees and employers. Over the years, the rules surrounding the compensation have been constantly adjusted to better suit current needs.
How does travel reimbursement work?
Travel reimbursement basically works as a flat rate per kilometre or as a reimbursement for your public transport costs. There are several options that employers and employees can consider:
- Fixed mileage allowance: You receive a fixed amount per kilometre for using your own transport, such as car, bicycle or scooter.
- Public transport reimbursement: If you travel by public transport, you can be reimbursed for its cost, often based on your public transport card or actual costs.
- Carpool allowance: Some employers offer an allowance if you travel together with colleagues.
- Home working days: If you work from home for part of the week, this may affect the amount of your travel allowance.
- Maximum untaxed allowance: In 2024, there is a limit on the maximum untaxed allowance per kilometre, set by the Inland Revenue.
If your employer offers a travel expenses scheme, it is important to know which form best suits your situation so that you do not overpay and make maximum use of the scheme.
Here’s how to apply a travel allowance in your organisation
As an employer, do you want to offer travel reimbursement in your organisation? If so, there are a number of steps you can follow to get this right. First, it is important to establish what form of travel allowance you want to offer. This could be, for instance, a fixed mileage allowance, an allowance for using public transport, or a combination of both. Then draw up a travel expenses policy in which you clearly set out the rules, such as the maximum reimbursement per kilometre and which costs are or are not reimbursed. Make sure this policy is clearly communicated to your employees, so they know what they are entitled to and how to apply for reimbursement. By keeping clear records of travel expenses, you ensure that reimbursements can be processed neatly in the payroll system.
Practical implications
Offering a travel allowance has some practical implications for your organisation. First, you need to consider the administrative burden. For example, you need to keep track of your employees’ travel distances and ensure that the allowance is calculated and paid correctly. Also, some employees may combine different means of transport, such as bicycle and train. This calls for a flexible arrangement that takes into account multiple forms of transport. In addition, home working days can affect the amount of compensation. For example, if an employee works three days a week in the office and two days at home, this should be adjusted in the allowance. It is important to regularly review the arrangements made so that they stay in line with your employees’ changing work patterns.
Laws and regulations in 2024
There are clear rules on travel reimbursement, relevant for both employers and employees. For example, the tax authorities set a maximum untaxed mileage allowance. This means that, as an employer, you can reimburse up to a certain amount per kilometre without having to pay tax on it. This untaxed limit has been set for 2024, meaning that if you offer a higher allowance. The excess must be taxed as wages. Furthermore, employers should take into account the conditions for reimbursement of public transport expenses and carpool allowances. It is also important to note that the rules may be different for employees with a leased car. The laws and regulations are intended to give both employees and employers clarity on the possibilities and limitations of travel reimbursement so that it can be applied fairly and correctly.
Recent developments
In 2024, there are some important developments in the field of travel reimbursement. One of the most discussed changes is the increase in the untaxed mileage allowance. This is intended to better reflect rising fuel prices and inflation so that employees are not disadvantaged by higher travel costs. We also see an increasing number of organisations reviewing their travel expense policies because of the increase in hybrid working. Employees are more often working partly from home, which calls for flexible allowances that take into account both home working days and office days. There is also a growing focus on sustainability. With employers encouraging their employees to use more environmentally friendly means of transport, such as cycling or public transport. These developments may affect the way employers organise their travel allowances.
Here’s what you need to pay close attention to when it comes to travel reimbursement
If you want to apply or claim a travel allowance, there are a number of things you need to pay close attention to. First of all, it is important to be aware of the applicable tax rules. The tax authorities set a maximum untaxed allowance per kilometre. And it is important not to go over this limit to avoid unexpected tax assessments. In addition, you need to consider the administration of travel expenses. Employers should keep accurate records of mileage and transport costs so that reimbursement can be processed correctly. Furthermore, in hybrid working arrangements, it is smart to make agreements about which days your employees are entitled to a reimbursement and how this is calculated. This way, you avoid confusion and possible errors in payment. Finally, it is a good idea to keep track of developments concerning travel reimbursement, so that your policy remains up to date.
The role of TriFact365
TriFact365 can be a valuable partner in automating the processing of travel expense reimbursement 2024. This software platform helps companies make administrative processes simpler and more efficient, including managing travel expenses. With TriFact365, employers can easily process employee expense claims. Also for travel expenses incurred. This not only saves time, but also reduces the risk of errors in administration.
