If you want to encourage your employees to bike to work, award them a bicycle allowance. This mileage allowance offers many benefits for both the employer and the employee. Read everything you need to know about the bicycle allowance here.
What is a bicycle allowance?
The bicycle allowance is a tax-free allowance paid by the employer to employees who regularly use bicycles for commuting. The amount of the reimbursement varies depending on the distance traveled and the form of the reimbursement.
How is the bicycle allowance calculated?
Bicycle compensation is usually calculated based on the number of days an employee cycles to and from work. The calculation also takes into account the commuting distance. The amount is usually expressed in euros per kilometer, and this rate is multiplied by the distance traveled per day. The total amount can be paid to the employee monthly or annually.
How much is the bicycle allowance?
The tax-exempt amount of the bicycle allowance this year is €0.27 per kilometer traveled. That is, the bicycle allowance is exempt from tax and NSSO contributions up to €0.27. If this amount is exceeded, the amount above the threshold is considered wages and subject to NSSO contributions and taxes.
Is a bicycle allowance mandatory?
Until recently, employers were not required to provide bicycle compensation to their employees unless otherwise provided for in an industry collective agreement. This was the case, for example, for Joint Committee 329.02 or certain public sector collective agreements.
Based on a collective bargaining agreement in the National Labor Council (NAR), since May 1, it is now mandatory for all private sector employers to provide a bicycle allowance of 0.27€ to all employees who commute to work by bicycle.
Nothing will change for employers who were already providing (mandatory) bicycle reimbursement.
The benefits of bicycle reimbursement
Offering employees a bicycle allowance has several benefits for the employer:
- Good for the environment by encouraging the use of sustainable transportation.
- Healthy workers: workers who bike to work regularly are healthier and less likely to get sick.
- Less congestion, less stress: it reduces the amount of traffic on the road, leading to less congestion and ultimately a better quality of life.
In addition to these benefits, a bicycle allowance is also financially attractive. The amount of the bicycle allowance is 100% deductible as a professional expense and is free of social security contributions. Other costs such as investments in infrastructure or bicycle accessories are also 100% deductible.
Combining bicycle reimbursement and bicycle leasing
Bicycle allowances are often awarded at companies where bicycle leasing is also offered. And rightfully so! A bicycle allowance is the perfect way for the employee to recoup the cost of bicycle leasing. Thus, an employee who travels enough miles can lease a bicycle almost for free.
Even without a bicycle allowance, bicycle leasing is a tax-efficient way of flexible pay, both for the employer and employee.
The employee pays no benefit in kind (VAA) and no Social Security contributions on a company bicycle. Bicycle leasing is therefore up to 70% cheaper than a private purchase of a bicycle.
Allocating a leased bicycle via gross salary exchange is often cost-neutral for an employer and is much more advantageous than a gross salary increase. The lease price of a company bicycle is a 100% deductible expense with no employer contribution.
Bicycle allowance, a good idea!
Bicycling is not only a healthy and green mode of transportation, but also offers a range of benefits to employers and employees. Providing a bicycle allowance to employees is a way to encourage the use of sustainable means of transportation, while also promoting the physical health of staff as well as reducing payroll costs. Thus, a bicycle allowance is a win-win for employer and employee.
