Episode 17 - Cost proper to employer: “Is your costs reimbursement policy secured”?

PwC's Workforce podcast

Cost proper to employer:  “Is your costs reimbursement policy secured”?

Costs proper to the employer, meaning expenses which are incurred by employees in the context of their employment agreement and then reimbursed by the employer, has become a “hot topic” with the tax and social security authorities. 

In practice, the reimbursement of such costs can be made on the basis of actual expenses or on the basis of monthly lump sum allowances that cover these expenses. If settled correctly, this kind of reimbursement is advantageous for both the employee and the employer in terms of administrative efficiency.

Due to the recent legislative change regarding the reporting of these costs, we can expect more audits (from the tax and the social authorities) of these reimbursement of costs “proper to the employer”. Therefore, it is essential to be prepared in case of an audit and to assess, as an employer, the quality of the internal cost policy.

During this podcast our experts from PwC Belgium & PwC Legal : Olivier Chapelle, Ingrid Kinet and Gauthier Vael  will tackle the different aspects to be taken into consideration when implementing such a costs reimbursement policy. Indeed, as the social security authorities and the tax authorities sometimes have different positions on the same question, it is essential to adopt a pluridisciplinary approach.

A well-implemented costs reimbursement policy reduces the risk of rejection of reimbursement as “costs proper to the employer”. In case of rejection, the rejected costs have to be considered as salary, with consequences for social security and tax.

Therefore, to prevent this risk, our experts share with you their analysis and recommendations to safeguard your remuneration policy and practice.