Company bike: leasing, tax advantages and other good reasons

On the pedals, get set, go! Company bikes are an environmentally friendly mobility option that relieves traffic congestion and reduces air pollution in urban areas. They are also a good alternative for companies and employees. But what exactly is a service bike and why is it a good choice? In this article, we give you a comprehensive overview of the company bike, its many uses, the benefits for employees and employers and relevant information for companies considering this option.

What is a company bike?

A company bicycle is a bicycle that is provided by the employer and can be used by the employee for business and private purposes; both for short trips between home and work and for business trips. There are different types of company bikes, including city bikes, electric bikes, cargo bikes and mountain bikes, which can be selected according to the needs of the company and its employees.

What are the advantages of a company bike?

For employees

The company bike offers employees the opportunity to integrate regular exercise into their daily routine and save costs for fuel, parking fees and public transportation.

There are also tax benefits. And a big plus in cities: you avoid traffic jams.

For employers

By offering company bikes, companies are making an active contribution to reducing CO2 emissions and demonstrating their commitment to environmental protection. Company bikes can be a valuable incentive for employees and better health and well-being can lead to increased productivity.

In addition, companies can claim company bicycles as a business expense and thus further reduce their tax burden.

Company bike leasing

When leasing a company bike, an external provider pays the purchase costs and makes the bike available to the company, which then passes it on to its employees. The company pays a monthly leasing rate for the use of the bike, which often also covers maintenance and insurance costs. The entire purchase price does not have to be paid at once and the leasing costs can be claimed against tax over time.

One major advantage of leasing is its flexibility. Companies can choose the term of the leasing contract, either for a specific period or as part of an employee benefits program. They can also choose from a wide range of bike models to suit the individual preferences and requirements of their employees. In the event of damage or defects, the lessor is responsible for repairing the bicycle.

Purchase of the company bike at the end of the leasing period

Caution is advised when purchasing a company bike at the end of the leasing period. The lessor often offers the used bike for sale, usually at a residual value of ten percent of the original purchase price. A binding purchase right can lead to
taxable wages
if the bicycle is purchased for less than the local final price. The tax authorities allow the simplified valuation at 40 percent of the recommended retail price at the time the bicycle is put into service, including VAT. A lower value can be verified. The flat-rate incentive tax of 30 percent in accordance with Section 37b EStG can be applied if the provision of the bicycle can lead to non-cash benefits.

Company bike Monetary benefit and 1% rule

The non-cash benefit of company bicycles is an important aspect that affects both employees and employers. If a company provides its employees with company bicycles, this is treated as a non-cash benefit that is added to the employee’s taxable income .

The monthly value of the bicycle rental is to be set at one percent of a quarter of the recommended retail price (rounded up to the nearest 100 euros). In fact, this corresponds to a “taxation of 0.25 %“.

With the so-called Salary conversion the employee receives part of his salary for the duration of the leasing period not in cash but as remuneration in kind. The employee therefore forgoes part of his monthly salary in the amount of the leasing installment.
The
benefit in money’s worth
for the bicycle is usually significantly lower than the salary waiver, so that the taxable gross salary is reduced.

Example:

List price company bike: 2,500 euros
Monetary benefit = 6 euros per month
Leasing rate = 70 Euro

E-bike as a company bike

Due to the higher purchase price of an e-bike, the tax benefits and possible additional leasing components such as insurance and repairs are particularly interesting.

Charging electric bicycles at the employer’s premises is also tax-privileged. Bicycles that are classified as motor vehicles under traffic law (e.g. S-pedelecs) are legally exempt from tax. However, the electric charging of electric bicycles that are not classified as motor vehicles is also tax-free if the employer provides the charging facility at the company.

Read more about this in our article: Charging electric cars at work: advantages and implementation available.

More safety in the fleet?

Instruct your drivers in the safe handling of vehicles and how to behave in the event of accidents via an e-learning course.

How can companies introduce company bikes?

Leasing option: Check which leasing provider offers the best conditions and a suitable concept. There are also specialized providers here, such as the
job bike
.
What infrastructure is required? Are you willing and able to offer secure parking spaces, charging facilities for e-bikes and, if necessary, changing rooms or showers?
Safety: It is important to support employees in the use of company bicycles, for example through bicycle safety training or the provision of bicycle helmets and other accessories. You are also obliged to provide instruction in accordance with the
accident prevention regulations § 70
must be carried out.
Internal communication: A successful introduction of service vendors requires sensitization of employees. Communicate the benefits of the company bike and motivate employees to use this offer. This can be achieved through information events and individual consultations.
Evaluation and adaptation: It is important to regularly evaluate the use of company bicycles and to respond to the needs and feedback of employees. Companies should be open to feedback and make adjustments as necessary to ensure the service bike program is effective and successful.