How much will a lease bicycle cost me as an employee?
Do you have access to bicycle leasing through your employer too? Or are you just curious about how much a lease bicycle would cost you as an employee? Then we’ve got you covered! Because we'll explain to you what a lease bicycle costs and how the lease price is calculated.
There are many employers today who optimise their employees' salary package with bicycle leasing. And with good reason: in fact, it's a very interesting fringe benefit thanks to government tax measures. But what exactly does that mean for the price of your lease bicycle? We'll explain it to you below, with some concrete examples!
How does bicycle leasing work?
Just like car leasing! The big difference? Bicycle leasing gives you more tax benefits than car leasing. The concept is that you lease a bicycle through your employer for a term of usually three or four years. At the end of the contract, you can take over your bicycle at a residual value of usually 16% of the original value or return it to o2o Bicycle Leasing.
What is included in the lease price?
How is the lease price for your bicycle calculated? There are several aspects included in the lease price, which is why we sometimes refer to it as an 'all-in price'. Below is a brief list of all the components included in a lease price:
● Lease of a bicycle for three years (or longer)
● Maintenance budget (included)
● Compulsory coverage (theft, damage)
● Optional covers and services (such as breakdown assistance, additional warranty insurance and civil liability for speed pedelecs)
● Bicycle accessories
You pay all this on a monthly basis as part of your gross salary, through your end-of-year allowance, leave days, mobility budget, bonus or bicycle allowance. Exactly how you pay for your lease bicycle depends on your employer and your status.
"Thanks to the gross salary exchange formula, a small amount is deducted from my salary each month for my lease bike. I don't have to worry about anything, because maintenance and cover are included. So easy!" – Helena, SEA Invest
But anyway, that still doesn't answer the question: "What does a lease bicycle cost? We'll explain more about that below!
What does a lease bicycle cost?
So, the cost of a lease bicycle depends on the price of your bicycle, choice of coverage, maintenance budget and any accessories. So it's impossible to tell you right now exactly what your lease bicycle will cost you. Fortunately, there is someone who can: our calculator. You can calculate the estimated monthly net contribution here. Is your employer a customer of o2o Bicycle Leasing? Then you can find out the exact lease price of your bicycle, calculated based on the exact parameters that apply to you. You make that calculation via your myo2o biker account.
Lease bicycle up to 40% cheaper thanks to tax relief
Bicycle leasing is up to 40% cheaper than a private purchase, but why is that? That's because of the tax relief you enjoy thanks to leasing. Curious about why bicycle leasing is fiscally advantageous? You can read more about it in our blog: 'Why bicycle leasing is so fiscally advantageous'.
"The bicycle leasing offer made me look at everything differently. The tax relief of 40% and the nice net bicycle allowance I see on my pay cheque each month are the best motivation to choose a bike. And just do the maths on how much I save on fuel costs..." – Wesley – City of Ypres
Not a Selling, General or Administrative Expense
Drivers of a company car pay about 1,000 euros net in benefits in kind annually for their vehicle. This is because the private use of your company car is seen as a benefit on top of your salary and is therefore considered taxable income.
The good news: those who choose a bicycle pay nothing at all in SG&A! The only condition set by the government is that you cycle to work on a regular basis. How often that may be depends on your employer. Usually, it amounts to once a week.
The financial benefit of gross salary exchange
In addition to paying no SG&A for your lease bicycle, you also have a financial benefit through the gross salary exchange. This is because your monthly contribution for your lease bicycle is deducted by your employer from your gross salary. Thus, your gross pay is lower, so you are taxed less.
Moreover, your employer has to pay less employer contributions if your gross salary is lower. The share of your employer's contribution they save as a result is invested in your lease amount. The part of the lease amount remaining after the deduction of the employer's contribution is what comes off your gross salary. So you do make a contribution to the lease package, but you actually pay only a fraction of that net yourself.
"For a distance of 60 km a day, the bicycle allowance is very nice. Add to that the fuel costs I save, and you can see why bicycle leasing really is a win-win story for me." – Dirk, Volvo Cars
Bicycle leasing: not just costs, but profits too?
So your lease bicycle is 40% cheaper than a private purchase. But what if we tell you that for some people, it even becomes a zero operation? Because with the net bicycle allowance that appears on your pay cheque each month, you can often reduce and sometimes even exceed the monthly lease amount. Not to mention the fuel costs you save by cycling to work!
Curious about the bicycle allowance? Then read here all you need to know about the bicycle allowance!
As all types of bicycles become more accessible thanks to bicycle leasing, speed pedelecs, cargo bicycles, long-tails, etc., are now also far more affordable – all perfect alternatives for replacing your car. So who knows, maybe that second car won't be necessary, and you'll save even more money that way?
