Now that the government has decided that the recommendation to work from home will expire, many employees will return to the office with back-to-school feeling on September first. Office policies for the new normal are beginning to take shape. One thing is certain: the COVID-19 pandemic will have a lasting impact on the way we work. The great home working experiment during the lockdown has shown the many benefits of working from home to both employers and employees. 9 in 10 employers are adopting a hybrid approach post-COVID in which there will be alternation between office work and working from home. But what impact does continued home working have on employee compensation? And what are the options for adapting current salary packages to it?
The company car gives way to flexible mobility
With increased working from home, the company car as part of the salary package is being questioned. In the new hybrid working model, it will become clear that the situation of each employee differs from another. Some employees may need a company car, others may only need it from time to time and others may not need it at all. The emergence of shared mobility such as cars, scooters, bicycles, steps, and more is already playing into this trend. But also the traditional public transport companies are offering more and more flexible formulas such as half-time passes. But what are the frameworks in which companies can offer flexible alternatives to the company car?
- A higher gross salary: some employers compensate for not choosing a company car by increasing the gross wage. Due to the progressive personal income tax in Belgium, this will often be less interesting than choosing a company car.
- The legal mobility budget: the mobility budget is a Belgian law that allows employees to exchange their company car for an equivalent budget. This budget can be spent on more than 100 different environmentally-friendly mobility options including a company car. The big advantage? The spending is untaxed. Click here to discover the options and concrete examples of the mobility budget.
- The cafeteria plan lets employers set a budget, which their employees can use to choose from a menu of benefits. The budget comes from a portion of gross pay (bonus or year-end bonus). One of the categories the budget can be spent on is mobility. In this category, employees can choose to buy an electric bike, sign up for a bike lease, and more. The goal is to exchange the heavily taxed money for tax-friendly alternatives.
- It is also possible to grant employees a mobility budget outside the framework of the legal mobility budget. In this case, there is no tax exemption. Thus, a benefit in kind will have to be paid for the mobility costs
Working from home brings new opportunities in terms of optimizing salaries
Increased working from home naturally entails costs for the employee. On the other hand, working from home is the most sustainable form of (im)mobility. The government is responding by taking favorable measures. Below is an overview:
- The home working allowances are tax-exempt amounts that you can grant to employees to compensate for the costs associated with working from home. There are multiple allowances related to homeworking:
Allowance for office costs: this is a non-mandatory allowance of which the maximum exempt amount is 129.48 € per month. It is supposed to cover all costs for a normal professional activity: usage of private space as an office, IT utilities (NOT including computer or printer, but utilities), insurance, water, etc...
Allowance for costs related to office furniture and IT material: this allowance is based on a list of furniture that is considered as "employer-related cost". It means that the employee can buy this furniture and ask their employer to be reimbursed for these costs.
Allowance for private usage of IT material: this allowance is already used to compensate employees who use their own computer or internet connection at home. This allowance also applies to the case of teleworking and is compatible with other teleworking allowances
- Mobility budget. You may think, what does this have to do with working from home? But working from home is a sustainable mobility solution par excellence. That is why you can finance your rent or mortgage interest with the legal mobility budget if you live within 5 km (as the crow flies) of your normal place of work. When an employee works more than 50% of his time from home, this is considered equal to the normal place of employment. In this case, therefore, the house rent or interest on the loan can be reimbursed to the employee. Concretely, in certain cases, this can generate a net benefit of up to 800€ per month.
The new normal will further contribute to the shift from a one-size-fits-all remuneration to a flexible plan tailored to each employee. New processes and tools will play an important role in assisting companies in this evolution. A platform like Mbrella gives employees access to 100+ mobility options in one tool. It allows HR managers to manage public transport subscriptions, kilometer reporting, mobility budgets, allowances, and commuting reimbursements in one single tool. Mbrella is integrated with social secretaries to avoid any payroll and tax hassle.
Do you have any questions about the establishment and implementation of flexible mobility? Do not hesitate to get in touch for an informal talk via this link!
Source: Acerta survey, KU Leuven & HRMagazine