Alternative compensation 2: employer-specific expenses

In the event that the employee has to face professional expenses that are not reimbursed by expense notes, the employer may pay a monthly lump sum to his employee in order to cover such expenses.

The lump sum is not subject to the tax withholding or social security contributions for the employee, and the employer can deduct this amount either entirely or partially if it is a fee whose deduction is limited by the code (e.g. car fees, representation fees).

Ideally, the recipient should keep evidence of these business expenses (e.g. invoices, tickets, proof of payment) for the first 3 or 4 months in order to demonstrate the reality of these expenses during a possible tax check.

The employer-specific expenses paid to the employee must be mentioned on the monthly pay sheet, indicating whether these are serious standards (i.e. the amount cannot exceed that allocated by the State to its officials) or not.

The ONSS has defined amounts not to exceed in order to benefit from the exemption:

Has. Reimbursement of 0.3653€ per km for commuting from home to work or for business trips

B. Reimbursement of 0.24€ per km for cycling trips from home to work or for business trips

C. Cost of stay in Belgium covering meals and accommodation: 35€ euros per day

D. Home office expenses covering electricity, gas, office equipment: 126.94€ per month

E. Parking fee if the employee has to pay regular parking fees: 15€/month

F. Garage fees: 50€/month

G. Car-wash fee: 15€/month

h. Meal expenses for employees who are on the road for at least 6 hours: 17.06€/day, but limited to 16 days per month and 40 days per calendar year (consecutive or not) in the same place. In the latter case, the IRS considers it to be a fixed place of work and the employee cannot collect a daily allowance for the days spent in that business relationship.

On the other hand, there is no fixed package for representation fees that an employer would pay to its employee. This package generally covers the costs incurred to attract customers, keep them satisfied, and build a professional network. These can be business gifts, drinks, flowers, etc. Since it is not always possible to obtain proof for such fees, they can be paid monthly in the form of a package. Of course, this must remain realistic in relation to the function performed.

Representation fees are deductible up to 50% for the employer.

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