Travel allowance increased, but does it cover fuel costs?

For years, the travel allowance in the Netherlands was 19 cents per kilometer. The tax-free kilometer allowance was last increased in 2006: from 18 to 19 cents. But due to the rising costs, it was really time for a new top-up. Since 2023 you can expect a fee of 21 cents. But is that enough?

You may have heard it in the corridors of your employer: the tax-free travel allowance per kilometer was increased at the beginning of this year. With a price increase of 2 cents to be exact. In 2022 you could still count on a tax-free refund of 19 cents. As of this year, that’s 21 cents. The increase will continue in 2024: the maximum exemption will then be 22 cents per kilometer.

travel allowance? The employer decides

Unfortunately, this increased fee does not automatically apply to everyone. It is up to the employer to determine whether employees receive a travel allowance or not. Employers in the Netherlands are therefore not obliged to reimburse travel expenses, unless otherwise agreed in a binding collective agreement.

The employer can also grant a higher travel allowance than the 21 cents mentioned above. Above this limit, however, the reimbursement is not tax-free: the employer must withhold income tax on the amount exceeding 0.21 euros.

Reimbursement for public transport

Do you use public transport to get to work? Then you can sometimes get tax advantages from it. In this case, the employer can reimburse the travel expenses incurred in full. Even if this amount is higher than the 21 cents per kilometer. Is it counted by kilometers? Then a maximum rate of 0.21 euros per kilometer driven applies.

Fee vs. gas price

All well and good, this increase of 2 cents, but in times of high fuel prices, are all kilometers reimbursed? Take a sample of your co-workers and the answer is most likely no. Many business drivers always have to pay extra.

“It’s crazy that you have to use private capital for the boss, while you only get reimbursed for the price of petrol from 2006,” said VZR chairman Jan van Delft last year in the DISPLAY. He named an amount of 39 cents per kilometer, which includes current fuel prices and depreciation. “Then not all costs are covered, but that’s reasonable and fair.” The gas prices are now a little lower than when he said it, but the 21 cents seems really too low.

Further changes

Curious about what else has changed this year in terms of income tax, minimum wage and employee tax credit? You can read about that in this article.