How can you manage expense allowances in your company in a smart way?
November 2025 - Expense allowances can be an interesting way to give your employees some extra breathing space without having to pay additional social security contributions as an employer. However, it is also an area that the tax authorities and the National Social Security Office (NSSO) are increasingly monitoring.
Anyone who pays allowances without clear evidence or proper justification risks them being considered as wages, resulting in additional contributions and fines.
What are “costs specific to the employer”?
Every employee incurs costs during their work that should actually be borne by the employer: think of travel with their own car, a home office with reliable internet, or office supplies. When you reimburse these expenses, they are referred to as costs specific to the employer. The big advantage? If the scheme is applied correctly, these allowances are exempt from tax and social security contributions.
You can choose between two systems: reimbursement of actual costs, whereby each expense must be substantiated with supporting documents, or a lump sum reimbursement, whereby you work with fixed amounts. In the latter case, you must be able to demonstrate that the lump sum is reasonable and corresponds to the actual situation.
A written expense policy is not a legal requirement, but it is strongly recommended. This avoids discussions afterwards and provides a clear framework for audits.
Changes in 2025
The government regularly adjusts the ceilings for various flat-rate allowances. Since 1 March 2025, the home working allowance for office expenses has been 157.83 euro per month. For business travel with your own car, a mileage allowance of 0.432 euro per kilometre has applied since 1 April 2025. Other professional expenses – such as laptops, extra screens or ergonomic office chairs – can still be reimbursed tax-free, as long as the professional link is clear.
Certainty through a ruling
Do you want to avoid the tax authorities questioning your expense scheme at all costs? Then you can request prior approval from the Advance Rulings Service. Such a ruling confirms the specific application of your allowances for a period of up to five years. This can offer considerable peace of mind, especially in the case of higher amounts or exceptional situations.
Please note: you cannot make such an agreement with the RSZ. However, the service publishes quarterly guidelines with amounts that are exempt from social security contributions. These are a useful reference point for adjusting your remuneration policy.
Avoid pitfalls
The tax authorities and the RSZ are now checking more closely than ever in this area. An allowance without proper justification can simply be reclassified as wages. The consequences? Arrears, tax increases and sometimes even fines.
To avoid this risk, it is advisable to follow a few basic principles:
· Work with a clear expense policy. Describe which allowances you grant and under what conditions.
· Document every amount. Both lump sums and actual reimbursements must be substantiated.
· Ask for advice or a ruling if in doubt. This will prevent unpleasant surprises.
· Review annually. Check whether your reimbursements still match the actual costs and the applicable ceilings.
Finally, do not forget to formalise your decisions and calculations. Include agreements on expense reimbursements in the minutes of your board of directors. In practice, many SMEs overlook this detail, with potentially costly consequences in the event of a tax audit.
