An 'energy budget' for your staff

An 'energy budget' for your staff

A major energy supplier gives employers the opportunity to offer employees free heating or electricity. The employee is taxed on it, but the taxable amount is separated from the actual value of the benefit, which is usually higher.

Flat rate value of benefits

Under tax law, an employee or company director is taxed on the true value of the benefits the employer offers. It is not the cost price of the benefit in the hands of the employer which is considered, but the value of that benefit for the employee.

To avoid endless discussions, some benefits are valued on a flat-rate basis. A cheap loan, for example, or a free home. There is also such a fixed calculation for heating and electricity, which cannot be deviated from. Not by the employer or employee, but also not by the tax authorities.

For some time now, the provision of free electricity has been estimated at 470 euros per year (1.030 euros for managers and directors) and at 930 euros (2.080 euros for managers and directors) for heating.


A large energy supplier recently obtained a ruling to also apply this flat-rate valuation to a new product it is launching. In concrete terms, the employer will conclude a contract with the energy supplier for the supply of energy and heating to employees. The employer offers its staff an energy budget, but the product can also fit perfectly into a so-called cafeteria plan, in which the employee is offered several alternative forms of remuneration – such as a company car, a company bicycle, meal vouchers or warrants.

The employee who enters this system is logically taxed on a benefit in kind that is taxed at a fixed rate (as described above).

The invoice paid by the employer (and which may be considerably higher than the fixed value of the benefit) is fully deductible.


The employer must allocate the employees a predetermined budget, possibly depending on the job category in which the employee is classified. In other words, the budget can differ depending on the employee’s function.

If the employee decides to join the energy budget, the employer concludes a contract with the energy supplier to supply energy to that particular employee.

There is, of course, also an agreement between the employer and the employees regarding the principles of the heating or electricity budget. That agreement must also contain a clause of 'prudent and reasonable person' (the former 'good family man'). The intention is to prevent the employee from starting to heat uselessly, leaving windows and doors open, etc. The clause allows the employer to take action to avoid excessive energy consumption (e.g. a refusal to participate in the future to the budget for heating or electricity).

The employee decides whether or not to subscribe to the budget.
He has an interest in keeping his consumption as low as possible because the part of the budget that he does not use can be paid out as salary, taxable according to the normal rules.
The employee can also switch to another energy supplier at any time and will therefore no longer fall under the budget for heating or electricity.

If the employee exceeds this budget, he must pay the difference out of his own pocket.
Please note: this additional payment is not a so-called 'personal contribution', as is the case with a company car. If the company director or a staff member has to pay part of the car costs himself, this is a so-called personal contribution that may be deducted from the amount of the benefit. The sum that your employee pays because he has exceeded his energy budget is not a personal contribution and can therefore not be deducted from the taxable benefit.

Cost deduction versus taxable benefit

The sums paid by the employer to the energy supplier are regarded as part of the employee's remuneration. This means that they are deductible as personnel costs, provided they are included on the tax pay slip.

The employer will be able to deduct the amounts actually paid, while the employee is only taxable on the (usually lower) fixed benefit valued.
Will the energy budget be the new 'salary car'?