Whether employees are entitled to travel allowance depends on a number of factors. When travel allowance is paid, this can entitle employers to fiscal benefits. Read more about the regulations in The Netherlands concerning travel allowance.
Travel allowance own transport
When employees use their own transport to go to work the employer can give compensation for that. However, the employer is only obligated to pay when that is determined in the company regulations, the collective labour agreement (CAO) or the employee’s contract. Travel compensation, in short, is not a legal arrangement.
For travel compensation for € 0,21 (was € 0,19 up to 2023) per kilometer or less, employees do not have to pay any taxes. And the employer does not need to withhold payroll taxes for this either. When the compensation is higher than € 0,21 per kilometer, then the Tax Authorities consider the part exceeding this amount as wages and it is taxed as such.
For the kilometer compensation it does not matter what form of transport the employee uses.
Travel allowance public transport
Employees that commute to and from work with public transport, can also receive a travel allowance for this. Same as with the compensation with own transportation, the compensation for the expenses of public transport are only mandatory when this is stated in the (collective) labour agreement. The employer can choose to either pay € 0,21 per kilometer or pay the expenses for public transportation or public transportation subscriptions in its entirety to the employee.
Employees that commute to work to and from work with public transport, when the commute exceeds a distance of ten kilometers, deduct these expenses from their declaration income tax.
The amount of the maximally deductible amount is dependent on the commuting distance and the number of days that the employee travels to and from work with public transportation. The deductible amount (2023) can be found in the table below.
Table travel deduction public transport for 2023
Travel allowance carpooling
Employees can when they offer carpooling options, compensate up to € 0,21 of the travel expenses to the driver. When the employees arrange their own carpooling, every employee (including the passengers) can receive a tax-free compensation of €0,21 per kilometer.
When employees make use of the parking facilities of the workplace, the employer can offer this with the so-called ‘nil valuation’. The compensation of the expenses of the parking are then, not part of the employee’s wages. This is also the case when an employee parks a company car outside the workplace. Because the car belongs to the employer, the parking expenses can be compensated untaxed. However, when the employee parks their own car and the employer pays for the parking expenses, this will need to be recorded as wages. These wages can be submitted as a final levy (free space). Make sure that the parking expenses you submit as final levy, remain below the threshold.
Would you like to know more?
Do you want to read more about the fiscal benefits? This article lists the most significant Dutch tax benefits for private individuals. Or read more about the labour conditions in the collective labour agreement or labour contract. The Tax Authorities can give you more information about transport, travel expenses and the kilometer compensation*.
*Need help with navigating Dutch websites? Contact us!