Employees can be paid a fixed, tax-free allowance for travel expenses when they commute regularly to the same workplace. This allowance does not have to be included in the ‘vrije ruimte’ (the scope of tax-free aggregated personnel costs), provided that it meets several requirements. For example, the amount paid as allowance as well as the travel expenses which it covers have to be supported through evidence. The amount must be based on the number of work-related trips/commutes presumably made by the employee this year as well as the distance traveled. If this changes, the amount of the allowance must be changed as well. In the ‘Handboek Loonheffingen’ (Manual on Payroll Taxes), the revenue service describes two methods to determine the amount of allowance. Here, the requirement of 36 weeks or 128 days is mentioned.
The first method is used when an employee is expected to commute to the same workplace five days a week for at least 36 weeks that year. For the calculation of the allowance, you may presume that the employee has 214 workdays in a calendar year (although you may presume a higher number of workdays if you can provide evidence that the number of days (s)he will commute to work is at least 25% more than 214 days). The number of workdays is then multiplied with the number of kilometers traveled per day and the result is subsequently multiplied with the tax-free allowance of max. € 0.19 per kilometer. To determine the amount per month, you then divide the result by 12. The travel allowance for part timers can be calculated by then applying the ‘part time percentage’.
The second method can be used when an employee will not commute to the his/her workplace every day. The starting point in this case is that the employee will have 214 workdays in a calendar year, (s)he will commute for at least 128 days in that year and you will pay a tax-free travel expense allowance of max. € 0.19 per kilometer. This way, an employee who works five days a week can opt to work from home for two days a week while keeping his/her fixed travel expense allowance.