Tax-free mileage allowance increased to €0.25 per kilometre

As the formal legislative amendment has not yet been implemented, the State Secretary for Finance has, in anticipation of this, issued an approving policy decision. This allows employers to already apply the higher reimbursement tax-free.

Applying the increased reimbursement is not mandatory. Employers themselves decide whether and from when they adjust the mileage allowance. If the reimbursement is increased, the difference of €0.02 per kilometre may be paid to employees retroactively for 2026.

Key point to consider
Coordinate in good time with your payroll administration whether and how you wish to implement this change in 2026, for example through a back payment or an adjustment to the ongoing reimbursement..