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Payroll Tax Handbook 2024 published
Further to an opinion by the Payroll Tax Expert Group, the tax authorities have explained in more detail in the Payroll Tax Handbook 2024 how to proportionally apply the number of working days (214) and home-working or travel days (128), and how and when to recalculate the fixed allowances for commuting and home-working, respectively, on a pro rata time basis.
The Tax and Customs Administration and has provided three subparagraphs with the new details:
- Fixed allowance for home-working days or travel to the fixed place of work
- Pro rata calculation
- Recalculation by time
The second newly-added paragraph explains what to do when an employee no longer works from home as a rule, using an example to show how this is calculated in practice.
128-day rule
If an employee works from home on at least 128 days, you may grant them a specifically exempt fixed allowance to cover home-working expenses in the same way as if the employee had worked from home on 214 days in a calendar year.
Or, if the employee travelled to a fixed place of work on at least 128 days they can receive a specifically exempt fixed allowance for commuting in the same way as if they had travelled to and from work on 214 days.
Pro rata calculation
The number of working days (214) and home-working or commuting days (128) must be applied proportionally if, "as a rule", the employee works at home or travels to work less than five days a week.
The tax authorities have provided two examples:
Example 1
Anton works five days a week. He works two days a week at home and travels to the office on three days (travel distance one way 20 km). Specifically exempt travel allowance per month: 3/5 x 214 days = 129 days; 129 days x (40 km x €0.23) / 12 = €98.90. Specifically exempt home-working allowance per month: 2/5 x 214 days = 86 days; (86 days x €2.35) / 12 = €16.84.
Example 2
Bouschra works four days a week. She works two days at home and two days at the office (travel distance one way 12 km). Specifically exempt travel allowance per month: 2/5 x 214 days = 86 days; 86 days x (24 km x €0.23) / 12 = €39.56. Specifically exempt home-working allowance per month: 2/5 x 214 days = 86 days; (86 days x €2.35) / 12 = €16.84.
The term "as a rule"
There is no tax definition of the phrase "as a rule". The Tax and Customs Administration states the following in this respect:
The employee no longer works from home "as a rule" if they have not worked at home for more than two months.
The employee no longer travels to a fixed place of work "as a rule" if they have not taken the journey for more than two consecutive months. You must assess this period of more than two months of not working from home or commuting per reason, such as leave, training course or illness. An employer should assess this on a calendar year basis. This means that if the reason extends beyond the end of the calendar year, from 1 January the employer should see it as a new reason. This is illustrated in the next example.
Example 3
A full-time employee has a five day working week. He works three days a week at the office and two days a week from home. The employee takes one day a week of parental leave for a period of one year (52 days). The employee notifies the employer of this in advance. From December 2024 he then works two days a week at the office and two days a week from home.
As to whether "as a rule" is still the case in this example in terms of travel to a fixed place of work, the following applies.
During 2024 the employee travels "as a rule" to the fixed place of work. Because in 2024 the employee takes one day a week parental leave for a period of four weeks. This does not lead to a change in the specifically exempt fixed travel or home-working allowance for 2024.
The employee takes one day a week parental leave for a period of 48 weeks in 2025. In 2025 the employee no longer travels three days a week "as a rule" to the fixed place of work. This does lead to a change in the specifically exempt fixed travel or home-working allowance for 2025.
The basis for the specific exemption for the fixed travel allowance for 2025 has to be changed to 2/5 (was 3/5 in 2024). The basis for the specific exemption for the fixed home-working allowance remains 2/5.
While the previous edition of the handbook gave no further explanation of the phrase "as a rule", this is now something to consider.