France updates travel allowance rules

France has introduced changes to the home-to-work travel allowance, allowing employers to optionally cover fuel or charging costs for electric, plug-in hybrid, or hydrogen vehicles. The update is intended to benefit from exemptions of social contributions and charges, and it applies only to the social regime for the year 2026.

Allowance limits and eligibility expanded

Three measures favoring employees include raising the exclusion limit from the social base of fuel costs from 300 euros to 600 euros per year and per employee. The travel allowance can be paid even if the employee’s home or workplace is served by public transport and can be combined with the mandatory coverage of public transport subscriptions.

Implementation and compliance requirements

Regulatory texts have not yet been formally amended to include the new limits, but companies are encouraged to anticipate these changes in their 2026 declarations. Employers must follow a formal procedure, including implementing the allowance through a company agreement or a unilateral decision, and employees must provide a declaration of honor regarding vehicle use for home-to-work trips.

Future increase announced

The French government announced on September 22, 2026, a proposed increase in the exemption ceiling for the fuel allowance, raising it to 1000 euros. However, this change will only take effect after the legal framework is established, and details about its effective date and duration of application are provided.