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Info Page - Calculate the TCO for the Mobility Budget in RewardFlex

Understanding and calculatingthe TCO for the Mobility Budget in RewardFlex

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Written by Arnaud Guyaux
Updated over a month ago

📚 Table of Contents

  1. Mobility Budget Amount: Legal Framework in 2025

  2. What is the TCO?

  3. The different types of TCO

    • TCO 1 – Simplified TCO

    • TCO 2 – Full tax view (to be used for the Mobility Budget)

    • TCO 3 – The optimized approach

  4. How to calculate TCO for the Mobility Budget ?

    • Step 1 – Choose what you wnat : differentiated TCO per worker or identical TCO per category ?

      • Option 1 : Identical TCO per category

      • Option 2 : Differenciated TCO

    • Step 2 – Calculate TCO according to the chosen approach

      1. If you chose a collective approach with identical TCO per category

      1.1 — Define a reference car per job category

      1.2 — Define a standardized fuel budget

      1.3 — Concrete example

      1. If you chose a differenciated TCO calculation

    • 2.1 - Flat-rated method

      2.2 - Actual-cost method

      2.3 - To be deducted from TCO

      2.4 - Business trips : should they be included in TCO?

  5. FAQ – Which situations impact worker's mobility budget amount?

Mobility Budget Amount: Legal Framework in 2025

Since the introduction of the mobility budget in Belgium, the law strictly regulates the amounts that can be allocated to this scheme. The mobility budget is determined based on the TCO (Total Cost of Ownership) of a company car, and it must comply with the ceilings and floors set annually through indexation.

In 2025, the amounts are as follows:

  • The minimum mobility budget is set at €3,164 per year. If the calculated TCO is lower than this threshold, the mobility budget is automatically raised to this minimum.

  • The maximum authorized amount corresponds to the lower of the following two:

    • 20% of the employee’s total annual gross salary,

    • €16,875 per year.

These amounts apply to the annual budget allocated under the mobility budget and are verified during implementation in RewardFlex.

What is the TCO?

The TCO, or Total Cost of Ownership, is an estimate of the total annual cost borne by the employer to provide a company car. It is not limited to the leasing or purchase of the vehicle, but includes all expenses linked to its use. The TCO serves as the basis for converting the car benefit into a mobility budget.

This estimate must be made carefully, as it determines the mobility budget amount. The law recognizes several levels of granularity in defining the TCO, depending on whether a simple, standardized, or very detailed approach is adopted.

The Different Types of TCO

TCO 1 – Simplified TCO

TCO 1 is a basic or simplified version, sometimes used in internal simulators or comparison tools. It is not compliant with mobility budget legislation, as it only accounts for part of the actual costs.

What TCO 1 includes:

  • Monthly vehicle rental (leasing or long-term rental)

  • Maintenance, tires, repairs, and replacements

  • Road tax

  • Non-recoverable VAT on invoiced amounts

  • Employer CO₂ contribution to social security (ONSS)

  • Fuel and/or electricity costs

TCO 2 – Full Tax View (to be used for the Mobility Budget)

TCO 2 adds a fiscal dimension to TCO 1 by including non-deductible expenses, i.e. costs that are not tax deductible under corporate or personal income tax.

What TCO 2 adds to TCO 1:

  • Tax on non-deductible expenses, including:

    • Non-deductible car costs (insurance, maintenance, etc.)

    • Fuel costs (deductibility limited to 50% for PHEVs since 2023)

    • Benefit in kind (BIK) generated by providing the vehicle

  • Tax deductibility rate of the vehicle (based, among others, on CO₂ emissions)

Why is TCO 2 crucial?
This calculation anticipates tax impacts and the real costs borne by the company. It is the only version recognized for calculating a compliant mobility budget, particularly in tools like RewardFlex.

TCO 3 – The Optimized Approach

TCO 3 goes even further. It considers tax savings generated by deductible expenses, in addition to taxes due on non-deductible expenses.

What TCO 3 includes in addition:

  • All elements of TCO 2

  • Minus tax savings from:

    • Partial or full deductibility of car, fuel, CO₂ expenses

    • Benefits linked to electricity (100% deductible)

Advantage of TCO 3:
It provides a very accurate picture of the net impact after taxes. Though less common, this calculation is valued by leasing companies or businesses with strong financial sensitivity, as it precisely measures the tax efficiency of vehicle choices.

How to calculate TCO for the Mobility Budget?

🧭 Step 1 – Choose what you want: Differentiated TCO per worker or identical TCO per category?

Before calculating a mobility budget for an employee, the employer must choose a TCO calculation approach. This choice is structural, as it must then be applied collectively to all employees in the same category.

⚙️ Option 1: Identical TCO per category

The TCO is defined once per job category, using:

  • A standard reference car

  • Or an average of actual TCOs of cars in this category

✅ Advantages

  • Time-saving and consistent treatment

  • Standardization of rules

  • Ideal for SMEs or large homogeneous teams

⚠️ Disadvantages

  • Less personalized (a highly mobile or very sedentary employee may gain or lose out)

  • Must be rigorously justified and documented

⚙️ Option 2: Differentiated TCO

The TCO is calculated specifically for each employee based on their current or eligible car and especially their personal fuel consumption.

✅ Advantages

  • Accurately reflects the employee’s actual situation

⚠️ Disadvantages

  • More administratively burdensome (multiple detailed calculations)

  • Different TCOs among employees in the same category → more complex tracking

  • Less financial predictability as it depends on individual situations

🚘 Using reference cars: a lever for simplification and consistency

When an employer sets up a mobility budget, the budget amount (TCO) must be calculated for each eligible employee. In principle, this calculation is individual, based on the car actually provided or the car the employee would be entitled to.

However, the law allows an alternative: using a “reference car” per job category.

🧭 Why use a reference car?
The goal is to simplify administration and ensure greater fairness between comparable employees. Instead of relying on the often heterogeneous history of car allocations (common in SMEs), the employer defines a TCO based on the average TCOs of cars within each homogeneous group of employees (e.g. sales, IT, managers).

This allows the employer to:

  • Standardize the mobility budget (TCO) calculation

  • Avoid disparities from past individual agreements

  • Facilitate flat-rate or actual-cost calculations without tracing costs car by car

  • Prepare for the possible generalization of the mobility budget to all company car users (expected from 2026)

⛽ And what about fuel costs?
If the employer chooses an identical TCO per category, a reference fuel budget per category can also be set (based on average internal consumption).

🧠 Once chosen, the approach must be applied uniformly for 3 years to all affected employees.

🔢 Step 2 – Calculate TCO according to the chosen approach

The mobility budget of an employee is calculated based on the car to which they are entitled at the time of conversion:

  • If conversion occurs at the end of a lease, the new car planned for the employee determines the budget.

  • If the employee does not yet have a car, the eligible car serves as the reference.

  • If the car is returned before lease end, the current car in use serves as the basis.

Depending on the case, here are the methods:

📌 1. If you chose a collective approach with identical TCO per category

The TCO is the same for all employees in a job category.

🚗 1.1 — Define a reference car per job category

The employer must calculate the average TCO of cars currently assigned to a given category.

This reference TCO determines the annual gross mobility budget for all employees in that function.

🔄 This approach ensures consistency, fairness, and administrative simplicity.

⛽ 1.2 — Define a standardized fuel budget


When using a reference car for a job category, it is also possible (but not mandatory) to define a reference fuel budget instead of considering each employee’s actual commuting distance.

This fuel budget is flat-rated based on average consumption observed for that category.

⚠️ Important: This reference fuel budget is only for calculating TCO when setting up the mobility budget.


In Pillar 1 of the mobility budget (eco-friendly car), the actual fuel expenses incurred by the employee are reimbursed at the time of spending.

📝 1.3 Concrete example

  • Category: “Sales Representatives”

  • Reference cars: Peugeot 3008 petrol or Renault Austral Hybrid

  • Average observed TCO: €9,400/year

  • Reference fuel budget (internal average): €1,500/year

➡️ The mobility budget for each employee in this category is set at €10,900 (subject to legal ceilings).

📌 2. If you chose a differentiated TCO calculation

Two calculation methods are possible:

2.1 — Flat-rate method


This method is based on legal formulas set by royal decree.
It has two parts: a fixed component and a variable component.

2.1.1 Fixed component:
Sum of the following:

  • Annual vehicle cost

    • If leasing: annual rental/leasing cost + average annual cost of items not covered by the lease (if company policy covers them) + non-deductible VAT + tax on non-deductible car expenses

    • If purchase: car’s catalog value (incl. tax on non-deductible portion) × 25%

  • Employer CO₂ contribution

2.1.2 Variable component:
Covers fuel costs linked to personal use, calculated via a flat-rate formula:

(6,000 km + [commute distance × 2 × 200 days]) × €0.1335/km

  • 6,000 km: flat-rate annual personal mileage (legal amount)

  • €0.1335/km: equals 30% of the public mileage allowance (valid from June 1, 2025)

2.1.3 Example calculation

Context:

  • Car: Peugeot 308 diesel on lease

  • Lease: €450/month

  • Additional costs (washing, tires, insurance): €75/month

  • Non-recoverable VAT: €900/year

  • CO₂ contribution: €1,100/year

  • Commute distance: 20 km

Calculation:

  • Fixed part: (450 + 75) × 12 = €6,300 + 900 + 1,100 = €8,300

  • Variable part: (6,000 + 20×2×200) × 0.1335 = 14,000 × 0.1335 = €1,869

➡️ Total TCO = €10,169

2.2 — Actual-cost method


This method uses real, verified company data. The TCO is the average of actual car costs over the past 4 years (or since commissioning if < 4 years).

Cost items to include:

  • Leasing or depreciation

    • If purchase: 20% of purchase value/year

    • If lease: annual rent × contract duration

  • Fuel or electricity

    • Annual bills, fuel cards, charging stations

  • Insurance

    • Annual premiums paid by employer (civil liability + full coverage)

  • Maintenance and repairs

    • Garage bills, parts replacements, inspections

  • Tires and carwash

    • Replacements + regular cleaning

  • Taxes

    • Registration, road tax, vignette

  • CO₂ social security contribution

  • Non-recoverable VAT

    • Non-deductible portion on all above costs (typically 35–50%)

  • Miscellaneous costs

    • Parking, home charging stations (if paid by employer), roadside assistance

2.3 — To be deducted from TCO

  • Employee’s personal contribution (if any)

    • Example: €100/month = €1,200/year deducted from TCO

2.4 — Business trips: should they be included in TCO?

When calculating TCO for the mobility budget, a key question arises: should business trip costs be included?

Two scenarios:

  • If not included in the fixed TCO component:

    • They must be reimbursed outside the mobility budget

    • Employee may receive a tax-free mileage allowance or expense reimbursement

  • If included in the fixed TCO component:

    • They are covered by the overall mobility budget

    • Employee does not receive additional tax-free mileage allowances or reimbursements

❓ FAQ – Which situations impact a worker’s mobility budget amount?

🔄 1. Mobility budget revision

  • Must the budget be re-evaluated yearly? → No.

  • Adjustments only if the employee:

    • Changes role

    • Gets promoted

    • Moves to a different vehicle category

Adaptation takes effect on the 1st day of the month of change.

🕒 2. Part-time work

  • For the 20% gross salary cap: calculation is based on full-time gross salary.

  • If an employee moves to part-time after entering the system → budget remains unchanged.

Special case:

  • If part-time means losing car entitlement under company policy → mobility budget ends.

  • If entitlement remains with personal contribution → employer may reduce budget if contractually provided and applied equally.

📈 3. Indexation & impact of public scales

  • Indexation of the mobility budget: no legal requirement.
    Employer can create its own formula if:

    • Consistent across employees

    • Within sectoral index limits

    • Formalized (individual or collective agreement)

    Negative indexation can be imposed if based on an objective internal index.

  • Public scales

    • Public mileage allowance: amount in force at time of employee’s request applies.

    • No retroactive modification of mobility budget required.

    • CO₂ solidarity contribution: does not affect initial mobility budget calculation; only impacts some Pillar 1 expenses.

🚘 4. Car and mobility policy

  • Change in company car policy (e.g. smaller models, switch to EVs):

    • Does not affect employees already in the system.

    • Applies only to new entrants (new hires or renewed entitlements).

    • Employer cannot unilaterally change existing mobility budgets via car policy changes.

📍 5. Relocation

  • Whether company or employee relocation: mobility budget amount remains unchanged.

  • However, it may affect eligibility for some Pillar 2 expenses (e.g. rent or mortgage reimbursement).

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