Mobility Budget Instead of a Company Car: Benefits & What You Need to Know

Taking the train to the office in the morning, using a car-sharing service to get to a client meeting at lunchtime, and getting around by bike on the weekends: Not every employee needs a company car for their daily commute. Flexible solutions are becoming increasingly important, especially with hybrid work models and changing work locations.

A mobility budget gives employees the flexibility to use various modes of transportation as needed . This raises a new question for companies: Does it always have to be the traditional company car, or can corporate mobility be organized in other ways?

We’ll explain how a mobility budget works, what its advantages and limitations are, and what companies should keep in mind when implementing one.

Contents

1. What is a mobility budget?
2. How does a mobility budget work in practice?
3. What are the benefits of a mobility budget?
4. A mobility budget versus a company car: Which makes more sense?
5. When is a mobility budget a good option?
6. Mobility Budget and Fleet Management: How Do They Fit Together?
7. Taxing a mobility budget: What are the rules?
8. Implementing a Mobility Budget: Six Steps for Businesses
9. Conclusion: A mobility budget as a supplement to a company car
10. FAQ on the Mobility Budget
11. Further contributions

What is a mobility budget?

A mobility budget is a sum of money set by the employer that employees can use for certain transportation options. Instead of providing only a company car, the company allows employees to use various modes of transportation.

Depending on the plan, employees can use their budget for the following modes of transportation:

Taxi and Transportation Services
Public Transit and the Germany Ticket
Long-distance train travel
Car Sharing and Rental Cars
Rental Bikes and E-Bikes
E-scooters and other sharing services

How does a mobility budget work in practice?

Companies determine the budget, which modes of transportation may be used, and whether the vehicle can be used for personal trips, commuting to work, or certain other mobility purposes.

The process is often handled through an app or a digital platform. Employees book their trips or submit the relevant receipts. The costs are deducted from the available budget and accounted for accordingly for tax purposes.

Whether unused amounts are carried over to the following month or expire at the end of the month depends on the specific plan. There is no automatic provision for a cash payout or for using the amount toward other benefits.

What are the benefits of a mobility budget?

The biggest difference from a traditional company car is the freedom of choice. Employees are not limited to a single vehicle but can combine different mobility options.

Companies also benefit from the wider range of options. However, the extent of these benefits depends on which mobility options are available and how the budget is allocated.

Benefits for Employees:

Flexible transportation options: Employees can choose from a variety of transportation options depending on their route, purpose, and personal needs.
Less reliance on one’s own car: Especially in areas where public transportation and car-sharing services are readily available.
An attractive added benefit: A mobility budget can complement the existing benefits package.

For Employers:

Predictable Budgets: Mobility services can be calculated using fixed amounts.
Tailored Solutions: Employees are provided with mobility options that fit their work and personal circumstances.
More Flexible Fleet Planning: Companies can make more targeted decisions about which employees need their own company car.
Incorporating alternative modes of transportation: The use of public transportation, bicycles, or sharing services can be specifically encouraged.

A man in a business suit pushes a bicycle through a brightly lit urban setting. CarWise offers digital solutions for mobility budgets that enable companies to promote individual mobility, optimize costs, and flexibly integrate alternatives to traditional company cars into their daily work routines. — The mobility budget offers employees great flexibility in choosing their mode of transportation, such as public transit or a bicycle.

However, the concept does not automatically lead to lower costs or emissions. The key factor is which modes of transportation are actually used and whether they replace, for example, car trips or vehicles kept on hand permanently.

A mobility budget versus a company car: Which makes more sense?

Whether such a model can replace a company car depends on the types of trips taken, the purpose for which a vehicle is needed, and what alternatives are available.

Criterion	Company Car	Mobility Budget
Usage	Fixed-assignment vehicle	Various modes of transportation as needed
Flexibility	Vehicle available at any time	Choosing Among Several Offers
Costs	Total Vehicle-Related Costs	Fixed budget plus administrative and potential additional costs
Suitability	Regular trips, high demand for vehicles	Changing mobility needs, good transportation connections
Administration	Vehicle, Contract, and Cost Management	Budget Management, Accounting, and Tax Classification

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When is a mobility budget a good option?

This model is particularly appealing to employees who work primarily from home, only occasionally commute to the office, or live in cities with well-developed public transportation systems.

The situation is different for employees who work in the field or in occupations that require them to regularly transport materials, tools, or equipment. In rural areas, too, the selection of suitable transportation options may be limited.

Therefore, the choice does not necessarily have to be between a “mobility budget or a company car.” Companies can combine both models and offer employees different mobility solutions depending on their job.

Mobility Budget and Fleet Management: How Do They Fit Together?

With a mobility budget, fleet management is no longer just about a company’s own vehicles. Companies must also consider how to effectively combine different mobility options .

Based on our experience at CarWise, we know that it’s crucial for the various options to work well together. Company cars, fleet vehicles, and external options should therefore be planned together.

Here’s an example: Employees need a vehicle for individual client appointments but primarily use public transportation to get to work. Instead of assigning each employee their own company car, the company could combine a mobility budget with a shared vehicle pool.

For the administration, this means that company cars, the vehicle pool, and the budget should all be consolidated into a single database. In Carano Fleet+, the CarWise Group’s fleet management software, company cars, contracts, and costs can be managed centrally, and key metrics such as cost per kilometer or utilization rates can be analyzed. This makes it clear which company cars are rarely used and where a mobility budget is a viable alternative. This flexibility in planning is essential for effectively combining both models.

Leasing companies and rental firms are also adapting their offerings. With LeaseWise, you can calculate not only traditional leases but also bicycle leases and private leases, while RentWise allows you to provide rental offers through an online rental platform.

Corporate Car Sharing as a Complement

Corporate carsharing allows employees to share existing fleet vehicles. Employees can reserve vehicles for specific periods of time without having to be permanently assigned a company car. This makes corporate carsharing a good fit for a mobility budget.

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Taxing a mobility budget: What are the rules?

A mobility budget is not automatically tax-free in Germany. Whether taxes apply—and, if so, which ones—depends on the modes of transportation used and how the employer provides the budget. (As of October 2026)

Different rules may therefore apply to different offers:

Public Transit and the Germany Ticket: Employer benefits for public transit may be tax-exempt under Section 3(15) of the Income Tax Act (EStG) if they are provided in addition to the wages already owed.
Company Bicycles: Special tax rules may apply to the provision of company bicycles.
Car-sharing, taxis, and other mobility services: How these are treated depends, among other things, on whether they constitute a benefit in kind, a cash payment, or a business-related trip.
50-Euro Exemption Limit for Non-Cash Benefits: Benefits provided in kind—such as credit with a mobility service provider—remain tax-free up to 50 euros per month. This is an exemption limit: If it is exceeded—even by a small amount—the entire amount is taxable.
Flat-Rate Taxation Under Section 37b of the Income Tax Act (EStG): For non-cash benefits exceeding the exemption limit, the employer may pay the tax at a flat rate of 30 percent.

However, there is no separate tax provision for mobility budgets. The flat-rate taxation of 25 percent on amounts up to 2,400 euros per year, as provided for in the draft of the Annual Tax Act of 2024, was removed during the legislative process and is not in effect (as of October 2026). Nevertheless, many guidebooks still describe it as current law.

It is also important to distinguish between additional employer benefits and deferred compensation. Not every tax benefit applies to both options.

Companies should therefore work with their human resources and finance departments, as well as their tax advisors, before implementation to clarify which benefits will be offered and how they must be documented and accounted for.

Implementing a Mobility Budget: Six Steps for Businesses

A monthly budget alone isn’t enough. For the plan to work in practice, companies must take into account the needs of their employees, internal processes, and tax requirements.

1. Analyze mobility needs

How do employees get to work? What types of work-related travel are involved? Who needs a vehicle on a regular basis, and who only needs one occasionally? A needs assessment reveals which options are actually needed and where alternatives to a company car might be feasible.

2. Set Goals and a Budget

Employers should define what they want to achieve with the budget. Is the goal to offer employees a more attractive package, to ensure predictable costs, or to allow for more flexible use of existing vehicles?

There is no prescribed amount for the budget. The previous mobility costs of the respective group and the tax limits serve as a guide: Since January 2026, a Deutschlandticket has cost 63 euros per month and can be reimbursed tax-free in addition to salary. For other components, the 50-euro non-cash benefit exemption limit provides a framework. If the budget is offered in lieu of a company car, it’s worth comparing it to the car’s previous total costs—from leasing and fuel to administrative expenses (based on current legislation as of October 2026).

Next, the amount available per employee is determined, as well as whether different employee groups receive different budgets.

3. Select mobility options

The selection should be based on the employees’ actual routes and job requirements.

4. Clarify Tax and Organizational Processes

Before getting started, companies must determine how to organize entries, receipts, reimbursements, and the treatment of payroll taxes. A digital platform can save a lot of work in this regard. It is important that all entries and expenses are fully recorded and can be traced later.

5. Involve employees and launch the pilot phase

A mobility budget only works if employees know which options they can use and how they will be reimbursed. A pilot phase involving selected employees or locations helps clarify any outstanding questions and refine the model before rolling it out company-wide.

6. Regularly evaluate usage and costs

How intensively is the budget being used? Which modes of transportation are preferred? Are there additional costs, or can existing mobility options be organized differently? By regularly analyzing usage, you can identify what’s working well and where improvements are needed.

Conclusion: A mobility budget as a supplement to a company car

A model like this can make corporate mobility more flexible. The key is for the program to align with employees’ needs and the company’s requirements.

Enabling Individual Mobility: Not everyone needs their own vehicle . Different modes of transportation offer alternatives to the traditional company car.
Consider Costs and Processes: Fixed budgets make planning easier. Tax requirements and administrative burdens must be taken into account during implementation.
Combining mobility options: Company cars , fleet vehicles, corporate car-sharing, and public transportation can complement one another depending on needs.

FAQ on the Mobility Budget

A mobility budget is an amount provided by an employer that employees can use for specified modes of transportation and mobility services. Depending on the model, these may include, for example, public transportation, car-sharing, bicycles, or taxi rides.

The amount depends on mobility needs, the modes of transportation offered, and the company’s available budget. Previous mobility costs, commutes, and the costs of comparable employee benefits can serve as a basis for calculation. There is no generally prescribed amount.

Not necessarily. The tax treatment depends on the specific benefit and the conditions under which it is provided. For example, subsidies for public transportation provided in addition to a salary may be tax-exempt under Section 3, No. 15 of the Income Tax Act (EStG). Different rules may apply to other mobility benefits.

There is no separate flat-rate provision. The flat-rate taxation of 25 percent on amounts up to 2,400 euros per year, which had been planned in the 2024 Annual Tax Act, has been eliminated. The following options are available: the 50-euro exemption limit for non-cash benefits, the tax exemption for public transportation subsidies under Section 3 No. 15 of the Income Tax Act (EStG), and, for non-cash benefits, flat-rate taxation at 30 percent under Section 37b of the Income Tax Act (EStG) (as of October 2026).

Yes, if the available mobility options adequately meet the employee’s needs. In cases of regular field work, special transportation requirements, or limited access to public transportation, a company car may still be a practical option.

That depends on the company’s policies. Depending on the plan, unused amounts may expire or be carried over. Any payout or use for other benefits must be specifically provided for and reviewed from a tax perspective.

A mobility budget allows for predictable expenses and a more personalized approach to employee mobility. It can complement existing company car policies and encourage the use of alternative modes of transportation. Whether this results in changes to costs or emissions depends on actual usage.

Further contributions

Written for you by

Hans-Joachim Guth

Hans-Joachim Guth is Head of Operations DACH at CarWise Group and Managing Director of Carano Software Solutions GmbH. He is an expert in fleet management and the digitalisation of business processes. After studying Business Administration, specialising in Human Resources and Organisation, in Berlin, he spent many years working as a consultant and product manager.

Through his work on efficient, practical software solutions such as Carano Fleet+, which help companies optimise their processes, he is consistently driving digital transformation in fleet management.