French Commuting Allowance

An insight into the tax-free commuting allowance in France

What is the French commuting allowance?

The French ‘prime de transport’, translating to commuting allowance, encourages employers to financially support their employees when it comes to their expenses for daily commuting. A tax-free amount of up to € 200 per year can be paid to employees who are obliged to use their car for the ride from their home to work. Opposed to the mandatory refunds of public transport tickets, the commuting allowance is an optional employee benefit.

What is covered by the commuting bonus?

The transport bonus partially reimburses the cost of fuel or electric power supply for the usage of the personal vehicles.

Conditions to be met

The French commuting allowance can only be paid tax-free under certain conditions. Notably, the employee’s place of work or home residence must be located outside a public transport perimeter. The allowance can also be paid to employees who are obliged to take their car due to constraint relating to their working hours.

How to set up the French commuting allowance?

It is an optional benefit that can be set up by simple decision of the employer. If the employer sets it up, all employees must benefit from it under the same conditions.

Exemptions from social contributions

The French commuting bonus is exempt from all social contributions and payroll taxes, within the annual limit of € 200 per employee for fuel expenses, and €500 for recharging an electric or hybrid vehicule. It must be mentioned on the French payslip.
The French commuting allowance can also be combined with the sustainable mobility allowance within the overall limit of €500 per year and per employee.

Why to set up the commuting bonus

Even though, the amount might seem very small when compared to the true costs of daily commuting, it is still a great benefit not to be neglected. Together with other optional and tax-free employee benefits, such as meal vouchers in France and employee vacation incentives, the commuting allowance can help to optimize labor costs in France.