Employer reimbursement of employee transport costs: what are your rights, obligations and benefits?
Are you an employee? Against a backdrop of inflation and soaring fuel prices, would you like to know your rights when it comes to covering the cost of your home-to-work commute?
Are you an employer? What if setting up solutions to cover the cost of your employees’ home-to-work journeys could help you build loyalty and even recruit more easily?
In this article, we take a closer look at the benefits of covering employee commuting costs.
What are the schemes for covering employee transport costs?
- Only one compulsory scheme: 50% of public transport or public bicycle hire season tickets.
Which employees are concerned?
All company employees, whatever their type of contract (permanent, fixed-term, full-time, part-time), including trainees and apprentices.
How much is covered?
Employers are required to cover 50% of the cost of season tickets purchased by their employees for travel between their usual place of residence and their place of work, using public transport or public bicycle rental services (urban transport season tickets, SNCF season tickets, etc.).
Payment is made on the basis of the second-class fares of these transport services, and on the basis of the shortest distance between home and work.
Please note that single tickets are not covered.
How do you pay for tickets?
In practical terms, the employer reimburses employees for season tickets purchased as soon as possible, and at the latest by the end of the month following the month for which they were validated. Annual season tickets are reimbursed on a monthly basis over the period of use.
The employer’s reimbursement of transport costs is subject to the employee handing over or, at the very least, presenting the season tickets.
The employee receiving the pass must therefore be clearly identified by first and last name, otherwise it will not be possible to reimburse the cost.
In the case of a bicycle rental subscription, if it is not possible to present a ticket bearing the employee’s first and last name, an affidavit will suffice to obtain reimbursement.
- Two optional schemes: the transport bonus and the sustainable mobility package
- Transport allowance
Which employees are concerned?
On an optional basis, employers can cover all or part of the fuel costs and expenses incurred by their employees for the use of electric, rechargeable hybrid or hydrogen-powered vehicles, when traveling between their usual place of residence and their place of work, subject to the following conditions:
- If their usual place of residence or their place of work is located in a commune not served by a regular public transport service or a private service set up by the employer, or if their usual place of residence or their place of work is not included in the perimeter of a compulsory mobility plan in application of articles L. 1214-3 and L. 1214-24 of the French Transport Code.
- If the use of a private vehicle is made essential by specific working hours that make it impossible to use public transport.
This reimbursement cannot be combined with the compulsory reimbursement of the cost of public transport passes or public bicycle rental services.
How much is reimbursed?
All fuel costs and costs incurred to power electric, rechargeable hybrid or hydrogen-powered vehicles, incurred by employees travelling between their usual place of residence and their place of work, may be reimbursed.
However, this reimbursement is tax and social security exempt, up to a ceiling of 500 euros per employee per year, including a maximum of 200 euros for fuel costs.
How do you pay for this?
In practical terms, the employer pays the transport allowance on a monthly basis, which must appear on the pay slips of the employees concerned.
In the event of payment of a travel allowance, the employer must be able to provide the following supporting documents:
- The means of transport used by the employee (specifically, a photocopy of the employee’s vehicle registration certificate)
- The distance separating the usual place of residence from the place of work,
- The tax rating of the vehicle (photocopy of the employee’s registration certificate),
- The number of journeys made each month (production of work schedule, for example).
- Sustainable mobility package
Which employees are concerned?
Employees commuting between their usual place of residence and their place of work by bicycle, electric bicycle, scooter, electric scooter, or as drivers or passengers in a car-sharing scheme, or by public transport, with the exception of subscription fees for the aforementioned services, or using other shared mobility services.
How much is covered?
Employees may be reimbursed for the full cost of travel between their usual place of residence and their place of work, using a means of transport eligible for the sustainable mobility package.
However, this reimbursement is tax and social security exempt, up to a ceiling of 500 Euros per employee per year.
How do you pay for sustainable mobility?
Coverage takes the form of a lump-sum allowance known as the “sustainable mobility package”.
This allowance is paid by the employer, provided that it is actually used for its intended purpose.
To this end, the employer must collect, from each employee concerned, for each calendar year, proof of payment or a sworn statement concerning the actual use of one or more of the means of transport covered by the sustainable mobility package.
The lump-sum sustainable mobility allowance must appear on the pay slip of the employees concerned.
It should be noted that this allowance can also take the form of a specific, dematerialized, prepaid payment solution, known as a “Titre-mobilité”.
In concrete terms, the Titre-mobilité is issued by a specialized, accredited company, which transfers it to the employer against payment of its value.
In this way, the “Titre-mobilité” can facilitate the day-to-day management of the sustainable mobility package set up by the company.
What are the advantages of covering employee transport costs for 2022 and 2023?
The various schemes described above have been strengthened and, in some cases, extended by the amended finance law for 2022 (Law no. 2022-1157 of August 16, 2022), for the years 2022 and 2023.
- Reimbursement of the cost of public transport passes or public bicycle hire services
The amended Finance Act for 2022 extends the tax exemption (for the employee) and social security exemption (for the employer) beyond 50% of the cost of public transport passes or bicycle hire services, up to a limit of 25% of this excess.
In concrete terms, by 2022 and 2023, 75% of the cost of a public transport or bicycle hire pass will be exempt from tax and social security contributions.
- Travel allowance
The amended Finance Act for 2022 broadens the scope of the transport bonus, by removing the two conditions referred to above for the years 2022 and 2023 (habitual residence or workplace of the employee located in a commune not served by a regular public transport service or a private service set up by the employer, or not included in the perimeter of a mandatory mobility plan in application of articles L. 1214-3 and L. 1214-24 of the French Transport Code, or if the use of a personal vehicle is made essential by specific working hours that prevent the use of public transport).
As a result, all employees using their personal vehicles to commute to work are potentially eligible for the transport bonus for 2022 and 2023.
In addition, for the years 2022 and 2023, it will be possible to combine the transport bonus with the compulsory payment of public transport season tickets and public bicycle rental services, in order to encourage employees to use multiple modes of transport (eg: use of personal motorized vehicle to go to the station (eligible for the transport bonus) and SNCF season ticket to go to the workplace (compulsory coverage of the public transport season ticket), up to a limit of 500 Euros per year and per employee, or up to the limit of the compulsory coverage by the employer of the public transport season ticket or the public bicycle rental service.
Finally, for 2022 and 2023, the tax and social security exemption for the transport bonus is capped at 700 Euros per year and per employee, including a maximum of 400 Euros for fuel costs.
- Sustainable mobility package
The Amending Finance Act for 2022 provides for an extension of the tax and social security exemption to 700 Euros per employee per year.
- Combining the sustainable mobility package with the travel allowance
In the event that the sustainable mobility package is combined with the transport bonus, the amended finance law for 2022 provides for the tax and social security exemption ceiling to be raised to 700 euros per employee per year, including 400 euros for fuel costs, for 2022 and 2023.
- Combining the sustainable mobility package with a subscription to public transport or a public bicycle rental service
In the event that the sustainable mobility package is combined with a subscription to a public transport service or a public bicycle rental service, the Amending Finance Act for 2022 definitively provides for the tax and social security exemption ceiling to be raised to 800 euros per employee per year.
These various schemes for covering employee transport costs are therefore undeniably advantageous, particularly in 2022 and 2023, given the general increase in tax and social security exemption ceilings.
Indeed, for the employees who will benefit, this will represent a real gain in purchasing power, in terms of the costs incurred to get to their place of work.
Similarly, for employers, the introduction of optional schemes to cover employees’ travel costs is an undeniable tool for building employee loyalty, and is even likely to be a strong argument in the recruitment process, at a time when recruitment difficulties are becoming more and more acute for companies, and when many employees are looking for a 100% telecommuting position, to avoid the travel costs incurred in getting to their place of work.
How do you set up the various schemes for covering employee transport costs?
- Covering the cost of subscription to public transport or public bicycle rental services
It is a legal requirement to cover up to 50% of the cost of public transport or bicycle rental.
No special arrangements are therefore required.
- Introduction of the transport bonus and the sustainable mobility package
A company or inter-company level agreement, or failing that, an industry-wide agreement, is required to set up the transport bonus and the sustainable mobility package.
In the absence of an industry-wide agreement, a unilateral decision by the employer is required, after consultation with the company’s Social and Economic Committee, if one exists.
Whether you are an employee or an employer, are you interested in covering the cost of employee transport, and would like to find out more, or even implement it in practice within your company? Our lawyers are at your disposal to answer all your questions and advise you. Our meetings can be held face-to-face or by videoconference. You can make an appointment directly online at www.agn-avocats.com.
AGN AVOCATS – Employment Law Department
09 72 34 24 72