In the Netherlands, employees who use their personal vehicles (car, motorcycle or bicycle) for work-related travel often receive compensation in the form of a Mileage (commuting) Allowance per kilometre by their employer.
Annually, the Dutch government establishes standard mileage rates, serving as the foundation for employer reimbursements to employees. The allowance per kilometre [reiskostenvergoeding] is a tax free ruling within Dutch legislation.
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Tax Fee Mileage Allowance
While the government sets the maximum tax-free mileage allowance, it is up to the employers’ discretion whether to apply it. This means that companies can choose to reimburse their employees the maximum tax-free rate, or to apply a lower or higher rate.
Employees will then have the option to enrol for a Home-to-Work Mileage Allowance, facilitating daily commutes between their residences and workplaces and vice versa. The distance covered is typically calculated along the most common route between home and workplace.
While the allowance is not mandated by law, processing the reimbursement via payroll is obligatory according to Dutch tax regulations. This reimbursement cannot be facilitated through expense systems like Concur.
The allowance has become an integral part of employee compensation packages, providing a mechanism for fair reimbursement for commuting related expenses.
The allowance does not apply to employees who have a public transport card or a business car provided by the company.
What Is the Mileage Allowance for 2025 in the Netherlands?
The mileage allowance for 2025 in the Netherlands is: EUR 0.23 per kilometre tax-free. This amount is not classified as salary by the Tax and Customs Administration of the Netherlands and remains unchanged from the Dutch travel allowance 2024.
More Information
Whether you are an employer, HR professional, or Works Council, we urge you to seize this opportunity to review your policies and engage with HR Legal and HR experts to navigate the complexities of employment law effectively.
- What is an HR Audit for Compliance in the Netherlands.
- FAQs on Dutch Labour Law: Essential Answers Employment Law.
