Commuting expenses scheme
As a paid LUMC employee your commuting expenses are tax deductible. A conversion scheme is used to this purpose. If you apply for this scheme, you will receive a tax-free reimbursement of € 0.19 per travelled kilometre from and to the LUMC. At the same time, this same amount is deducted from your gross holiday pay and/or end-of-year bonus. As a result, you won’t have to pay any income tax over that amount, and thát is your tax advantage. This scheme is voluntary and is available to all appointed
Calculation example (fictional)
Let’s say your income tax is 50%. With your salary you receive €2,000 gross holiday pay, which will leave you with a net holiday pay of €1,000.
You apply for the conversion scheme and have a right to €1,000 as tax-free reimbursement of your commuting expenses. Then you ‘swap’ this tax-free reimbursement with your gross holiday pay. As a result, the taxable amount is reduced to €1,000. After the 50% tax deduction you net holiday pay is €1,500: €500 more than before.
So in short: gross holiday pay €2,000 > €1,000 tax-free + (€1,000 taxable -/- 50% tax) = € 1.000 tax-free + €500 > net holiday pay €1,500.