Kilometric allowance: quarterly or annual indexation?

The kilometric allowance granted to federal civil servants is now indexed on a quarterly basis. Is this also the case for all kilometric allowances paid to workers for business travel? That's what we're going to find out.

Obligation to award a kilometric allowance

As an employer, you must provide your workers with the tools they need to perform their work. When your workers use their private vehicles for business travel, you must cover these expenses.

There is no minimum amount to be granted. However, many sectors require payment of a flat-rate kilometric allowance. In this case, you are required to pay the amount stipulated by your joint committee. This is often (but not always) the amount the state pays its federal employees.

Kilometric allowance for federal civil servants

The kilometric allowance granted to federal civil servants was indexed once a year, on 1 July. In view of the high inflation in 2022, the government has modified this indexation. Since 1 October 2022, this kilometric allowance has been indexed quarterly.

Sector obligation

When sectors provide for the payment of a kilometric allowance, they usually refer to the allowance granted by the State to federal civil servants. Some sectors refer to the most recent royal decree (from 2017) for payment of the kilometric allowance, which was amended in 2022. In this case, the quarterly indexed kilometric allowance is applied.

Other sectors sometimes refer to an old royal decree (from 1965) which has not been amended. In this case, indexation remains annual.

To find out what kilometric allowance you should grant, you can consult the sector information.

Quarterly and annual amounts

Social and tax treatment of the kilometric allowance

The kilometric allowance granted to workers for business travel is an employer's own expense, provided it is based on a serious standard.

Initially, following the new Royal Decree providing for quarterly indexation of the kilometric allowance, the SPF Finances and NOSS adapted the amount of the kilometric allowance considered as an employer's own expense and followed the new quarterly indexed amount.

Since 1 July 2023, however, the annually indexed amount (€0.4280) is higher than the quarterly indexed amount (€0.4259). The question therefore arose as to whether this higher amount could be considered a serious standard.

A tax circular and the latest NOSS instructions dispel any doubts. Both administrations accept both the quarterly indexed and the annual indexed amounts as serious standards, provided there is no “shopping around” between the two. This means that employers who opt for the annual flat-rate system must retain this choice for at least 1 year, and can only switch to the quarterly flat-rate system on 1 July of the following year.

What to remember?

If you're not sure whether you're awarding the right amount of kilometric allowance, consult your joint committee's sector-specific information ("Transport costs" document).

Your sector has not provided for a kilometric allowance? You can opt for either amount, as long as you maintain this choice throughout the period from 1 July of one year to 30 June of the following year.

Sources:

Royal Decree of 10.11.2022 amending the Royal Decree of 13.07.2017 fixing the allowances and compensations of members of staff in the federal civil service.

Circular 2023/C/78 on kilometric allowance for business travel.

NSSO administrative instructions of 25 September 2023.

Circular No. 725 of 19 September 2023 - Adjustment of the kilometric allowance amount - Period from 1 October 2023 to 31 December 2023, Belgian Official Gazette of 16 October 2023.