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Working in The Netherlands: Travel expenses (part 1)

On April 13, 2017 by Dutch Umbrella Company

Travel expenses: It is not compulsorily, but most companies in The Netherlands reimburse the costs for business traffic for their employees. In the collective agreements, company regulations or in your labour contract you can find the agreements regarding travel allowance. In the coming two blog items, we want to give you all the information about travel expenses and company cars. With this week: traveling by private transport.

Do you want to know more about driving an electrical car, a company car and the cost of public transport in The Netherlands? Read ‘Working in The Netherlands: Travel expenses (part 2)‘.

Travel by private transport

When you travel by private transportation it is common to receive an untaxed fee. This fee may not exceed the maximum of € 0,19 per kilometer. It does not matter if this is commuting or any other business transaction such as transportation to a client or business meeting.

The tax-free reimbursement of € 0,19 per kilometer doesn’t apply for:

  • additional kilometers made out of employees private travel such as bringing children to school;
  • a reimbursement for (parts of) travel your employer arranges for the employees (fixed fee).

For commuting your employer can reimburse a fixed allowance based on the rules as given by the tax authorities. The most used calculation method is as follows:

(number of kilometers one way * 2) * € 0,19 * 214 working days / 12 months * part time percentage = untaxed fixed travel allowance per month.

To calculate the fixed travel allowance the calculation uses 214 working days. Vacation, national holidays and sickness are then already considered. In the case of absence of the employee, for example due to sickness, the travel allowance can be paid for another 6 weeks and then needs to be stopped. If your employer wants to reimburse more than € 0,19 per kilometer, everything above € 0,19 per kilometer is wage and thus taxed accordingly.

Other fees

Reimbursements for travel expenses your employer pays in addition to the € 0,19 per kilometer, will be labelled and taxed as salary. Which includes fees for parking, tolls, fees for (additional) depreciation of the car and extra fuel consumption by a trailer or vehicle damage.

Parking expenses and final levy

When an employee makes parking expenses with a company car, these costs are intermediary costs and you can reimburse them tax free. However, this is different when an employee makes parking expenses with his private car.

When the employer reimburses € 0,19 per kilometer, parking expenses are deemed to be included in this reimbursement. When an employee declares parking expenses, the parking expenses are taxable. So, you need to include them in the payroll with a final levy. Reimbursing parking expenses or permit at the home of the employee should be taxed in the payroll.

Any questions about travel expenses?

Would you like to know more about net compensations for travel travels? Not sure about your travel allowance as an employee? Don’t hesitate to contact us, send us an email at [email protected] and we’ll answer any questions you might have.