What changes with the new distance allowance for construction
The current collective agreement in the main construction industry also means a new distance allowance from 2023. In this article, you’ll find out what has changed for companies and employees in the construction industry with regard to compensation for commuting time and how you can implement the legal requirements quickly and easily.
Definition: What is the travel distance allowance?
The distance allowance, also known as travel time allowance, compensates employees for trips from home or the office to the more distant construction site. For employees, they mean – often long, exclusively work-related – travel times. In most cases, they are not made with one’s own car, but with a company vehicle or collective transport, so they cannot be claimed on the tax return. However, most employers do not count this time as time worked on the construction site. The distance allowance compensates this time for employees in monetary terms.
While the distance allowance will continue to be calculated until the end of 2022 as a lump sum supplement amounting to 0.5 percent of the employee’s standard hourly wage (TL) or monthly salary, the procedure has changed at the beginning of 2023. Now, the distance allowance is no longer calculated as a wage component of the total hourly wage. In addition, from now on it depends on the actual distance.
What will change in 2023 with regard to compensation for travel time in construction?
In the last round of collective bargaining, the collective bargaining partners agreed on a change in the calculation. In concrete terms, this means that the 0.5 percentage points from wages will no longer apply from 2023. Instead, there will be a distance-based travel time allowance in the future. In 2024, the amount will increase by one euro in each case. This records all journeys to the construction site – from the first kilometer. The salary itself is paid only starting at the construction site, as is common in the industry.
With the new collective bargaining agreement, starting in 2023:
- Employees will receive 6 euros per day for commutes of up to 50 kilometers from January 1, 2023. In 2024, the compensation will increase to 7 euros.
- For a travel distance of 51 to 75 kilometers, the compensation will be 7 euros in 2023 and will rise to 8 euros in 2024.
- For distances of more than 75 kilometers, there will be compensation of 8 euros in 2023. In 2024, it will be 9 euros.
With the new travel compensation rule, contractors have more work to do. They must now always check: How far is the project from the home address or the construction yard?
The pure time tracking is no longer sufficient to calculate the construction wage. With the 123onsite construction payroll module, you can still automate your payrolls and make them easy – with preset route information.
Implementing the new compensation for travel time – it’s that simple
You already do your time tracking using 123onsite? Then you know the benefits of easy, mobile tracking:
- Minimization of errors when recording working times without the need for cumbersome timesheets
- can also be used offline
- all data available in real time
In connection with the construction wage module, you can now also easily include the travel time compensation.
For this, two questions are crucial:
- Does the employee generally meet the conditions for claiming and receiving compensation for a particular day?
- To what extent can he claim compensation – i.e. how many kilometers are to be assessed?
Through time tracking, the first question for this review is automatically answered.
So the second thing you have to do is check how many miles the person actually drove to the construction site. The app covers this via zones that correspond to the mileage levels specified in the tariff. If you enter which project is how far away, the correct calculation will be made automatically. This way, you can automatically pay out the appropriate compensation – without having to assign one of your employees to check the whole thing per person and per project. You simply define the distance of the projects once and the wage is checked and calculated completely automatically via the software. This is where the interaction of the different modules scores points in comparison.
By the way: You are extremely satisfied with your employees and want to give something back to them? Some contractors deliberately set themselves apart from the industry by including the entire route as working time. You can easily adjust the setting to suit your project.
To a certain extent, employee motivation can always be supported in monetary terms.
How the right software helps contractors with travel compensation
Bring more efficiency to your construction business with automated digital time tracking and construction wage calculation. At the same time, you ensure that you implement the requirements of the collective agreement. This way, you can avoid trouble from the outset and be completely relaxed when facing an audit. Because you are safe:
- The set of rules is adapted to the current requirements, it runs automatically thereafter. Of course, you can always control or manually adjust.
- Wage calculation and payment runs smoothly and changes in the law do not interfere with your day-to-day operations.
- You don’t tie up any more capacity in your accounting department.
- The software minimizes errors.
- Your employees will continue to be satisfied because their wages will be paid without errors or delays even under the new system.
- All calculations are clear and understandable, both for accounting and for your employees.
123onsite’s modules give companies a low-cost solution that they can implement quickly. With simple tools they get immense help to implement current and future changes in the law.
Integrated time tracking and construction payroll software takes the pressure off your construction business. Your employees are satisfied, the process runs stress-free and the changes in the law can be implemented very easily right from the start. Thus, the change in the calculation of the compensation for travel time for construction from 2023 will be implemented quickly and easily through meaningful digitization.
Picture credits: 123onsite/Timo Lutz advertising photography