Understanding Company Cars in The Netherlands: All you need to know

At Remote, we partner with you as the Employer of Record (EoR) for your team in The Netherlands. While we don't directly provide company cars or manage vehicle leases, we offer straightforward ways for you to extend this valuable benefit to your employees. Here's how:

In this article:

• Understanding Company Car Options with Remote
• Option A: Offering a Car Allowance
• Option B: Reimbursing Vehicle Expenses
• Important Information About Dutch Taxation (and why the so-called “bijtelling” applies here)
• For Clients: Setting Up Car Benefits in Remote
• For Employees: Submitting Your Expense Claims
• Frequently Asked Questions

Understanding Company Car Options with Remote

As your EoR in The Netherlands, Remote handles payroll and compliance. We don't directly offer company cars, fuel cards, or vehicle leases. However, if you'd like to provide a car benefit to your Dutch employees, you can easily do so through one of the following two options:

Option A: Offering a Car Allowance - A Regular Payment for Vehicle Costs

A car allowance is a fixed amount added to your employee's regular monthly salary to help cover their vehicle expenses.

• Your Employee Chooses Their Vehicle: They lease, rent, or purchase a car in their own name.
• You Set Up a Simple Monthly Allowance: In Remote, you'll go to the "Pay items" section, then "Allowances," and select "Recurring monthly." You can enter the total amount you want to provide, or have Remote calculate the gross amount needed to ensure your employee receives a specific net amount ("gross-up"). 
• Allowance Included in Regular Pay: This allowance is treated as part of the employees’ regular salary in The Netherlands, and as such subject to wage tax and social security contributions (both employee and employer contributions), which Remote automatically handles.

Option B: Reimbursing Vehicle Expenses - Covering Actual Lease or Rental Costs

Instead of a fixed allowance, your employee can submit their actual monthly lease or rental costs for reimbursement.

• Employee Pays and Keeps Records: Your employee pays their monthly vehicle lease or rental invoice and keeps a copy of the receipt.
• Employee Submits an Expense Claim: They log into Remote, go to "Expenses," click "Add expense," and upload the receipt. They'll choose "General expense" and enter the amount.
• Your Approval Ensures Timely Payment: You (or a designated manager) will approve the expense before the payroll deadline.
• Reimbursement Included in Salary: Remote will include the reimbursement in their regular salary payment. In The Netherlands, these types of reimbursements are considered representation costs if all costs in relation to the lease-car are fully covered (e.g. costs for fuel, insurance, etc.), and will be reimbursed free of taxation. Instead, the system of bijtelling applies for the employee.

Important Information About “Bijtelling” (and why it applies here)

You might have heard about “bijtelling” in The Netherlands. Bijtelling applies when an employer fully covers the costs associated with a lease or rental car, or directly provides a company car to an employee for both business and private use. In that scenario, depending on the emission, a percentage of the car's list price is added to the employee's taxable income each month for personal use of the car.

For example, an employee enters into a private lease contract with a lease-company for a BMW X5 2026:

• Catalogue Value BMW X5 xDrive50e 2025: EUR 103,792;
• CO2 emission: 19 gram p/km → Applicable rate bijtelling = 22%;
• Taxable amount of bijtelling: EUR 103,792 * 22% / 12 = EUR 1,902.85 per month;
• Tax liability: EUR 1,902.85 * 49.5% (highest tax bracket) = EUR 941.91 per month.

For Clients: Setting Up Car Benefits in Remote

1. Your Employee Manages the Vehicle: Ensure your employee has arranged their vehicle lease, rental, or purchase in their own name.
2. Setting Up a Recurring Allowance (Option A):
   • Go to the "Pay items" tab in Remote.
   • Select "Allowances."
   • Click "Add allowance."
   • Choose "Recurring monthly."
   • Enter either the gross allowance amount or the desired net amount (and select "gross-up" if needed).
3. Approving Expense Reimbursements (Option B):
   • Ensure your employees are aware of the expense submission process (see the "For Employees" section below).
   • Regularly review and approve expense claims in the "Expenses" section of Remote before the payroll cut-off date.

For Employees: Submitting Your Expense Claims (Option B)

1. Log in to your Remote account and navigate to the "Expenses" section.
2. Click on "Add expense" and select "General expense."
3. Upload a clear copy (PDF or photo - No screenshots) of your monthly lease or rental invoice.
4. Enter the total (gross) amount in EUR and select the correct month for the expense.
5. Include the following information as a Note: “Lease Expenses Company Car”.
6. Click "Submit." You can track the status of your claim ("Pending," "Approved," "Paid") on the same page.

Frequently Asked Questions

• Can we reimburse mileage instead of lease payments? No, you can only request mileage when using your own transportation for business purposes. For such transportation you can use the "Mileage claim" option under "Expenses." In The Netherlands, the tax-free amount per kilometer is €0.23 per kilometer in 2026; 
• Can we "gross-up" an expense reimbursement? No, the "gross-up" option is only available for fixed allowances. Expense reimbursements are processed for the actual amount submitted.
• Does Remote provide insurance for the vehicle? No, vehicle insurance remains the responsibility of the employee. The monthly allowance or reimbursement can be set to cover insurance costs if you choose.
• Will the car allowance affect statutory benefits? Yes, because a car allowance is considered part of regular pay, it will increase the employee's taxable base for social security contributions, including pension, health, unemployment, and long-term care insurance.
• Are there any consequences for the employee when entering into a private lease contract? Yes, the employee will be registered with the BKR. This could potentially impact the employee’s creditworthiness.

We hope this clarifies how you can provide car benefits to your employees in The Netherlands through Remote. If you have any further questions, please don't hesitate to reach out to our support team.