Company bike: a sustainable, healthy and smart choice

Why is a company bike so interesting?

There is no need to withhold tax or pay social security contributions on the benefit of providing a bicycle, provided that the employee actually uses the bike for commuting.

For the employee, the bicycle will be exempt from taxes if the employee opts for the deduction of flat-rate professional expenses. If the employee opts for the deduction of actual professional expenses, the bicycle is not exempt, and the actual value must be taxed. For this reason, it will be mandatory from tax year 2025 (income 2024) to report the benefit of the bicycle on a tax form 281.10.

Implementing a company bike scheme

Step 1: Choosing to purchase or lease

Employers can choose to purchase company bikes themselves and then make them available to the employees. However, a more common route is for the employer to lease a bicycle from a leasing company. Although leasing is more expensive for the employer, it offers a more comprehensive service package, including theft and damage insurance, and takes the practical follow-up out of the employer's hands. Moreover, the employer can spread the cost over a lease period of usually 3 or 4 years.

Step 2: Financing

Of course, the company bike can be added as an additional salary component to the employee's existing salary package. However, it is much more common to opt for 'budget neutrality' so that the employer's total wage costs do not increase. In this case, the employee exchanges part of their gross salary or end-of-year bonus (possibly within the framework of a cafeteria plan) for a company bike. It is important that this salary exchange does not result in a gross salary below the sectoral minimum wage.

Note also that there is a general obligation for all employers to provide a bicycle allowance to employees who regularly use a (company) bike to get to work. The amount of this bicycle allowance depends on the applicable sectoral rules. In the absence of sectoral rules, a bicycle allowance of € 0.28 per kilometre applies (amount for 2024).

Step 3: Preparing the necessary documents

It is strongly recommended to draft a bicycle policy that outlines all agreements related to the use of the company bike. Consider agreements regarding the maintenance of the bicycle, consequences in case of theft or damage, agreements upon leaving the company before the end of the lease period, etc.

Additionally, an annex to the employment contract should be prepared in which the employee agrees to the conversion of part of their salary for a company bike. A change in salary can only occur with the (written) consent of the employee. This annex should also include that the employee will actually use the company bike regularly for commuting.

Do you have any questions about granting a company bike and the formalities involved? Do not hesitate to contact one of our experts.