1. Not a benefit in kind
Let’s start with the concept of a benefit in kind (BIK). While this is standard practice for company cars, lease bicycles are not categorised as BIKs, based on the following provisions:
- This tax exemption only applies when you use your lease bike for commuting.
- The exemption applies to any type of bike: from city bikes and folding bikes to mountain bikes, speed pedelecs and racing bikes.
- The same rule also applies when the bike is coupled with a company car or under the second pillar of the mobility budget.
This tax benefit is therefore beneficial for employees who frequently use their lease bike to cover their commuting miles. So while company cars are becoming more heavily taxed, you need not worry about this when it comes to your lease bicycle. As such, this is a real benefit for you as an employee!
Please note: If you ride your bicycle exclusively for private use, BIK rules do apply. This is calculated according to the bike’s actual value.
2. No social security contributions required
Did you know that, since 1 January 2017, the private use of company bikes is no longer subject to social security contributions – and this with retroactive effect? Therefore, if you lease a bike through your employer and use it for commuting, this is not counted as a wage benefit. As a result? You pay no social security contributions on the lease bicycle.
However, if you lease a bicycle through your employer exclusively for private use, that’s a different story. In that case, the bike is considered a wage benefit, meaning you are liable for the usual social security contributions. So it all relies on you commuting. Quite the incentive, right?
3. The bicycle allowance
Your employer can pay a mileage allowance for commutes on your lease bike. And the good news? This allowance is tax and social security contribution exempt up to a maximum of €0.27/kilometre (applicable rate since January 2023). This means you basically pay off the cost of your lease bicycle in just a few years.
Since May 2023, every employer is even required to pay a bicycle allowance to employees who regularly cycle to work. For more information, read our blog post ‘All you need to know about the bicycle allowance’.
4. Gross salary exchange or end-of-year bonus
Does your employer provide the option of leasing a bicycle via gross salary exchange or end-of-year bonus? Then you pay on average 40% less than if you bought the bike yourself. On top of that, you also won’t have to shell out a huge amount in one go to get your dream bike. Thanks to the monthly three or four-year lease formula, you will simply be exchanging a small amount of your gross salary each month.
Another benefit to this gross pay formula? As an employee, you have a greater budget for a more expensive lease bicycle (e.g. a speed pedelec) than if you were to purchase one yourself using your net salary.
So you see, all these tax benefits make leasing a bicycling through your employer a shrewd move financially for you as an employee. So, time to start thinking about your new (lease) bike!
Want to lease a bike through your work?
Is your employer an o2o customer? Then create your myo2o Biker account and calculate your exact net lease price.
Your employer hasn’t joined o2o yet? Then you will first have to convince your employer to become an o2o partner. Get the ball rolling with our handy persuasion package.
Enjoy your new lease bike!