Managing charging costs in the mobility budget: flat rate or actual costs?

Pillar 1 of the mobility budget is growing fast. More and more companies are swapping classic lease contracts for an electric car within the mobility budget. Great news. But it raises a question most HR and fleet managers still don't have a good answer to: what do you do with the charging costs?

Two methods are legally allowed: a flat rate (fixed monthly deduction based on a formula) or actual costs (real consumption per month). Both are valid. But the choice isn't as straightforward as it sounds.

What is Pillar 1?

Quick context. The mobility budget has three pillars. Pillar 1 covers the eco-friendly company car, including lease and fuel costs. Pillar 2 covers sustainable mobility and housing expenses. Pillar 3 is the cash payout of whatever budget remains on December 31.

The cost of Pillar 1 gets deducted monthly from the mobility budget, based on the car's Total Cost of Ownership. Fuel cost is part of that  and can be settled either as a flat rate or based on actual costs. Use our TCO calculator to run the numbers.

Which cars qualify?

Not every car fits Pillar 1.

Ordered before 1 January 2026 (if not zero-emission), the vehicle must meet at least one of these conditions: low CO₂ emissions (below 95 g/km and the latest Euro standard), hybrid with at least 0.5 kWh battery capacity per 100 kg of vehicle weight, or not worse than the previous company car on those criteria.

Ordered after 1 January 2026: the car must be fully zero-emission, electric or hydrogen.

That's exactly why charging costs matter more than ever. If Pillar 1 almost by definition means an electric car, then the charging cost question isn't a side issue. It's a core question for every company with a mobility budget.

Flat rate vs. actual costs: how does it work?

Two methods. Different logic. Different fit.

Method 1: Flat rate

The employer estimates the monthly charging cost using a fixed formula from Circular 2024/C/16:

Flat rate = (6,000 + commute distance × 2 × 200) × 30% of the government's per-km allowance

That amount gets deducted automatically each month regardless of what was actually charged. The charging card limit matches that monthly flat rate, so make sure the card supports it technically. The employee knows exactly what they can charge.

Good to know: you can also include the flat-rate charging cost in the lease cost itself. Most companies lease excluding charging costs, but the option exists.

Two things not to forget. The employee must explicitly agree. The flat rate is the flat rate. And employees who drive a lot for work ("on-the-road profiles") can get a higher limit or an unlimited charging card. Their business driving costs get reimbursed outside the TCO.

Method 2: Actual costs

With actual costs, every charging session gets deducted from the mobility budget in real time. The employee keeps full flexibility over how they split their budget across all three pillars.

A quick example. Say an employee has €700 mobility budget per month.

The TCO is the total amount. No surprises. No hidden costs on top of what was agreed.

Same note here for on-the-road profiles: employees who drive a lot professionally need a correct TCO. Otherwise they lose too much budget to work-related kilometres  which defeats the purpose.

When to use which method?

Both are legally valid. But they don't fit every situation.

Why managing charging costs is so hard

Most companies go with the flat rate today. Not because it's the best method, but because it seems the simplest. And that's understandable, because the actual cost method comes with real operational challenges.

The flat rate is almost never right

A flat rate is an estimate. Estimates miss.

Flat rate too low: €80 deducted, €100 actually charged. The employer loses €20. Flat rate too high: €100 deducted, €90 actually charged. The employee loses €10.

One flat rate for everyone almost guarantees a mismatch for part of the group. Someone always pays too much.

How Mbrella solves it

The problem isn't which method you pick. It's the admin around it.

Mbrella connects the Budgets and Charge modules in one platform. Here's how it works in practice. The employee charges at home, at work, or on the road. The charge card tracks every kWh. The platform calculates the actual cost, no estimates, with CREG rates applied automatically. The budget adjusts: only what was actually consumed gets deducted.

The flat-rate method stays fully supported too. Mbrella lets you set a monthly charging limit per employee, restrict countries, and toggle fast charging on or off. So the flat rate stays workable without anyone overpaying.

FAQ

Can an employer choose between flat rate and actual costs? Yes. Both are legally allowed. The right choice depends on the employee profile and how much admin your team can handle.

Does the employee have to agree to the flat rate? The flat-rate method needs to be included in the company's car policy. Individual consent isn't required, as long as the arrangement is clearly described in the policy.

What are the CREG rates and why do they matter? The CREG publishes maximum reimbursement rates per kWh for home charging every quarter, per region. Employers can reimburse electricity costs for home charging up to that rate. With the actual cost method, these rates determine the real charging cost.

What about on-the-road profiles? Employees who drive a lot for work can get a higher limit or unlimited charge card under the flat-rate method. Their business driving costs get reimbursed outside the TCO. With actual costs, they need a correct TCO to avoid their budget being drained by professional kilometres.

Are home charging costs taxable for the employee? No, as long as the reimbursement is based on actual costs and follows the CREG guidelines.

Want to see how Mbrella connects charging costs and the mobility budget for your organisation? Book a demo or download our practical guides and templates for a smooth implementation.