Buying a bike is fun, leasing a bike is smart. Discover the financial benefits of bike leasing, both for the employee and the employer.
In the overviews of countries where the tax burden is highest, Belgium traditionally scores very high. Although this pressure can undoubtedly be lowered, in the short term there are few possibilities for employers to give employees a higher net wage directly. Fortunately, there are creative solutions! In the labor market, too, the rule is: if you are not strong, you have to be smart. And that is where a leased bike can offer a financially interesting alternative.
The (para)fiscal benefits
The basics
In fact, company bikes are tax and parafiscal exempt, provided you actively use the bike for commuting. This has advantages for both the employee and the employer. The former does not have to pay social contribution and benefit all nature, which in the latter case is the case with a company car. Taxes on a company car increase, but with a leased bicycle they are non-existent.
The fact that there is no employer contribution is also of interest to the employer. In addition, the cost is also 100 percent deductible, saving you about half the cost. When you lease a bicycle through gross salary exchanges or end-of-year bonuses, employees pay an average of 40 percent less than if they bought the bike themselves.
3500 euros bicycle allowance per year
Those who come by bicycle often also claim a bicycle allowance. On that allowance, you don't have to pay taxes and social security contributions up to an amount of 35 cents per kilometer. Until now, there was a ceiling at 2,500 euros per year, but that will be raised to 3,500 euros.
Want to know more about bicycle reimbursement? Read our blog post.
Cafeteria plan and mobility budget
There are several ways to fund a salary bike. Those with a cafeteria plan, for example, can use the end-of-year bonus as a budget. You can do that if an exchange of the end-of-year bonus into another benefit is not excluded in a sectoral collective bargaining agreement. Another option is the mobility budget, which you can use to exchange (the right to a) company car in it.
You can also lease a bicycle without a cafeteria plan or mobility budget. This can be thanks to financing by the employer or financing by the employee. In the first case, the cost of the bicycle, which is 100% corporate tax deductible, comes on top of the salary. In the second case, the employee exchanges part of the salary (gross, net or, for example, the end-of-year bonus) for the leased bicycle.
Some comments
While bicycle leasing is a very convenient solution to reward employees, there are situations in which it is less easy to apply. This is the case, for example, with employees who are paid on a pay scale , because they cannot simply receive less pay than agreed upon. Whether in such a case you can work with a solution such as the arrangement through the thirteenth month or vacation pay depends on the joint committee.
Those wishing to lease an expensive bicycle may choose to spread the salary exchange over a longer period than the years in which you would lease the bicycle. The amount of the salary exchange should never exceed the cost of the lease, but the two periods need not coincide.
An example
Suppose you are an employee with a gross salary of 2,600 euros, paid well above bar wages. You pay 13.07 percent social contributions, your employer a patronage contribution of 25 percent. Your net salary at that time is 1808.14 euros.
If you want to lease the 2,500 euro Gazelle Paris C7, it costs 100 euros per month. Yet this cost is not entirely for the employee. For example, if you work through the gross salary exchange, your employer will transfer the financial benefit of patronage contributions to you. As a result, the gross amount of the company bicycle will be reduced by the benefit of employer patronage contributions.
Thus, the total wage cost for your employer is unchanged. As an employee, you have to pay another piece yourself, which in this case will be 68.66 euros. Because both the social contribution and the payroll withholding tax then decrease, you end up with a net wage of 1760.39 euros. So in reality, you only lose 47.75 euros per month and your employer doesn't feel any of this financially. A win-win!
Contact one of our employees without obligation. Then we will be happy to explain over a coffee and 2 speculoos.
Learn more
👨💼Ben you an employee?
Want to know how much a leased bike would cost you as an employee? Explore our calculator. Which has an indication of how much a bike lease would cost for the employee.
👨💼Ben you an employer or HR?
Then download our financial bicycle guide! He has more insight into how bicycle leasing can be cost-neutral for employers.
The benefits of bicycle leasing!
Check out these blog articles on the other benefits of bike leasing:
🌱 Ecological: bicycle leasing and the green benefits
🕓 Functional: less stress and faster from A-Z
🍎Health: bicycle leasing and health
