The bicycle allowance: what is it?
The bicycle allowance is a mileage allowance paid by the employer to employees who make (part of) their commute by bicycle. The employer decides whether he grants a bicycle allowance and what the value is. It is therefore a favour and not an obligation, unless this is laid down in a CAO of your sector. The bicycle allowance is an interesting solution for employees who have their own bicycle, a lease bicycle or a company bicycle.
The bicycle allowance is primarily intended for cyclists to cover costs. In addition, a bicycle allowance stimulates employees to jump on their bikes more often for commuting. And the more cycling employees, the more joy… and benefits.
- For the bicycle allowance, the employer may deduct an amount of up to 0.24 euros per kilometre as a 100% deductible business expense. This reduces the company profit and therefore also the corporate tax, which is a considerable advantage for the company. Moreover, the bicycle allowance is free of social security contributions.
- Investments in bicycle infrastructure and accessories are 100% tax deductible. o2o partner Enervest even provides bicycle stands with charging capacity for e-bikes with energy generated by solar panels.
- Parking spaces for bicycles are much cheaper than for cars. By converting one classic parking space into a bicycle shed, you can create space for as many as ten bicycles!
- Employees who come by bicycle are less sick, less stressed and more productive.
- By bike, you don’t have to wait in that endless traffic jam. This way, you start a busy working day fit and on time.
- Every cyclist makes a contribution to a better environment and … to the sustainable image of the company.
- As an employer, you have a leg up with bicycle leasing when it comes to attracting top talent. You respond to personal mobility needs and offer a high-tech bicycle.
A bicycle allowance offers many advantages. Companies that already work with a bicycle allowance often combine this with bicycle leasing. In this way, employees enjoy all the ‘bicycle benefits’ provided by the government.
Bicycle leasing in your company in four steps
How much is the bicycle allowance?
The employer determines the amount. Up to 0.24 euros, the bicycle allowance is legally exempt from taxes and social contributions. As an employer, you can always decide to use a higher amount, but then the remaining amount is taxable as professional income.
The government wants to encourage the use of the bicycle for commuting and can index the amount of the bicycle allowance annually. The employer is free to apply the indexation or not.
How many kilometres and which journeys?
- The bicycle allowance only applies to the kilometres travelled to and from work. But which route does the employee take? The company looks for the best road together with the employee. Because the shortest way is not always the safest!
- The employer can determine whether the bicycle allowance applies for a single home to work trip or also for the return trip.
- The employer may even reimburse several rides back and forth per day. For example, when the employee has lunch at home and thus travels between work and home several times a day.
- As an employer, you can also pay the bicycle allowance for business trips, even if these are done with a company bicycle. In this case, the bicycle allowance is a cost ‘proper to the employer’ that is 100% deductible, but does generate social charges.
- There is no legal limit to the number of kilometres. With this, the government motivates the choice for a comfortable, safe and pleasant route.
Example 1: If the employer pays a bicycle allowance of 0.20 euros per kilometre, this allowance is fully tax-exempt. When the employer provides 0.30 euros per kilometre, the first 0.24 euros are exempt from tax. The other 0.06 euros are taxable (equals salary).
Many kilometres on your record
Keeping track of the exact number of kilometres cycled by all employees: how do you do it? There is no legal regulation for this. To keep everything well-organised, many companies opt for a digital registration linked to electronic access control or a bicycle calendar. The employer often has the employee sign a statement in honour, stating the frequency of cycling and the number of kilometres of the commuter route.
Combination with other mobility allowances
An employee can only receive one tax-exempt compensation for the commuter trip. Much depends on the different forms of mobility for which the employer provides an allowance. An employee who covers the entire route by bicycle is entitled to a bicycle allowance. However, when an employee uses a train, bus or (company) car for the same route, the bicycle allowance is not always mandatory. For each company, the situation is different.
Example 2: You can cycle from home to the station and continue your journey to work by train. If the employer allows it, a combination of a bicycle allowance and a public transport allowance is possible in this situation.
Example 3: An employee who has a company car can also receive a bicycle allowance for the days when the commuter trip is made entirely by bike.
Bicycle allowance + bicycle leasing = an ideal combo
The bicycle allowance is not the only tax benefit companies and employees make use of. The government also stimulates the offer of bicycle leasing and the combination of both is an interesting choice for many people. Unlike a company car, the benefit in kind is completely exempt from social security and taxes. As a result, employees enjoy a nice financial benefit without the employer having to increase its wage costs. By the way, did you know that about 80% of the employees live within a ten km radius of their work and only 15% comes by bike? So still a lot of cycling potential!