Given the dramatic rise in fuel prices recently, some employers are keen to help their employees by contributing to the cost of commuting to and from work.
Provided certain conditions and limits are met, this assistance can be treated as a business expense, and therefore exempt from contributions and taxes.
What measures are available?
Case 1: the employee uses his own vehicle
When an employee is obliged to use his or her personal vehicle to get from home to work, the employer may (optionally) cover the cost of commuting to and from work by paying :
- or a "transport bonus" to cover the cost of fuel or power for an electric, plug-in hybrid or hydrogen vehicle,
- or a mileage allowance for a car or motorized two-wheeler.
Employee conditions
Employees are eligible for this coverage:
- whose habitual residence or place of work is located in a commune not served by a regular public transport service or a private service set up by the employer;
- for whom the use of a personal vehicle is essential due to special working hours (night work, staggered working hours, continuous work, substitute shifts, etc.).
- whose usual place of residence or workplace is not included in the perimeter of a mandatory mobility plan in application of articles L.1214-3 and L.1214-24 of the French Transport Code;
However, employees are excluded:
- who benefit from a vehicle made permanently available by the employer, with the employer covering the cost of fuel, electricity or hydrogen for the vehicle;
- who are housed in such a way that they do not incur any transport costs to get to work;
- or whose transportation is provided free of charge by the employer.
Expenses covered
The only personal transport costs that may be covered are :
- of fuel,
- powering electric, plug-in hybrid and hydrogen vehicles.
The employer may decide to cover all or part of the expenses incurred.
The amount, terms and criteria for reimbursing these expenses are determined :
- by company agreement,
- failing that, by industry agreement.
- in the absence of an agreement, by unilateral decision of the employer, after consultation of the CSE, if any.
When the employer decides to cover all or part of the cost of fuel or electricity for a vehicle incurred by its employees, it must ensure that all employees falling within the scope of application benefit from this scheme, according to the same terms and conditions and the distance between home and work.
However, there is nothing to prevent the employer from modulating this coverage according to the distance separating the home from the workplace.
This optional coverage cannot be combined with the compulsory coverage of the cost of a public transport season ticket.
Waiver of covered expenses
-
If the employer pays a transport allowance :
The cost of fuel or power for electric, plug-in hybrid or hydrogen vehicles is exempt from all social security contributions, up to an annual limit of :
- 200 per employee for fuel costs
- 500 for the cost of powering electric, plug-in hybrid or hydrogen vehicles.
-
If the employer pays mileage allowances :
The amount excluded from the basis of assessment for contributions and levies resulting from the employer's payment of mileage allowances may not exceed the total amount of expenses actually incurred by the employee for journeys between his usual place of residence and his place of work.
Receipts
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If the employer pays a transport allowance:
The employer must be able to :
- justify the payment of expenses by obtaining the necessary information from employees (residence outside a transport perimeter or essential use of personal vehicle);
- present a photocopy of the employee's vehicle registration certificate.
As the amount of expenses reimbursed is flat-rate, the number of kilometers traveled is irrelevant. No proof of expenditure is therefore required as long as the amount reimbursed does not exceed €200 for fuel costs, or €500 for power supply costs for electric, rechargeable hybrid or hydrogen vehicles.
-
If the employer pays mileage allowances
The employer must be able to provide proof of :
- The means of transport used by the employee
- Distance between home and workplace
- The vehicle's tax rating
- The number of trips made each month
Combination of transport allowance and mileage allowance
The exemption from social security contributions for the cost of fuel or power for electric, plug-in hybrid or hydrogen vehicles can be combined with the exclusion from the tax base for the cost of mileage allowances.
Exemption from social security contributions is subject to compliance with the conditions attached to each of the two schemes.
However, the total amount excluded from the basis of assessment for contributions and contributions resulting from both the payment of fuel or power supply costs for electric, rechargeable hybrid or hydrogen vehicles and the employer's payment of mileage allowances, cannot exceed the total amount of expenses actually incurred by the employee in commuting between his usual place of residence and his place of work.
Example:
An employee incurs fuel costs of €350 per year. He is eligible for fuel expenses and mileage allowances.
The employer may opt :
- or for a payment of €350 in mileage allowances,
- or for a double payment of up to €200 in fuel costs and up to €150 in additional mileage allowances (i.e. a total of €350, corresponding to actual expenses).
Case 2: the employee commutes using a mode of transport eligible for the "sustainable mobility package".
Employers can (optionally) cover the cost of commuting to and from work by bicycle, electric bicycle, carpool as driver or passenger, public transport or other shared mobility services.
This is paid for in the form of a "sustainable mobility package".
Please note:
It cannot include the cost of a subscription to a public passenger transport service, or a subscription to a public bicycle rental service that is already covered by the mandatory 50% reimbursement scheme.
Employee conditions
All categories of employees are likely to be concerned by this scheme (permanent and fixed-term contracts, temporary workers, apprentices, trainees, etc.).
Conditions relating to the modes of transport used
The modes of transport eligible for the "sustainable mobility package" are :
- Bicycles, including pedal-assist bicycles, owned or leased by the employee;
- Carpooling (as a passenger or driver) ;
- Public transport (unless covered by the compulsory public transport subscription scheme);
- Rented or self-service mopeds, motorcycles and personal mobility devices (motorized or non-motorized personal mobility devices);
- Car-sharing service with electric, rechargeable hybrid or hydrogen-powered vehicles;
- As of January1, 2022, personal mobility equipment (motorized or non-motorized personal mobility equipment) owned by the employee.
Terms and conditions
The amount, terms and criteria for the payment of expenses in the form of a "sustainable mobility package" are determined :
- by company agreement,
- failing that, by industry agreement.
- in the absence of an agreement, by unilateral decision of the employer, after consultation of the CSE, if any.
When the employer decides to cover all or part of the costs in the form of a "sustainable mobility package", he must ensure that all employees within the scope of application benefit from the same terms and conditions.
Waiver of covered expenses
Expenses incurred by employees as part of the sustainable mobility package are exempt from contributions and contributions up to a limit of 500 euros per year and per employee.
Receipts
To qualify for exemption from social security contributions, the employer must provide proof that the sums allocated have been used for their intended purpose.
Each year, the employee must provide a sworn statement or proof that he or she has used the means of transport eligible for reimbursement under the sustainable mobility package.
Combining the "sustainable mobility package" with other benefits
The employer's reimbursement of expenses incurred by the employee as part of the sustainable mobility package may be combined with :
- the cost of public transport passes or public bicycle hire. However, the cost of the sustainable mobility package is exempt up to a limit of €600 per year, after deduction of the cost of the public transport pass paid by the employer.
- the employer's reimbursement of fuel or power costs for an electric, rechargeable hybrid or hydrogen vehicle can also be combined with the sustainable mobility package.
However, the employer's contribution to the sustainable mobility package will be exempt up to a limit of €500 per year, after deduction of the cost of fuel or power for an electric, rechargeable hybrid or hydrogen vehicle, and reimbursement of any parking costs based on the most economical rate.
