Bikeleasing Company Bike Tax Guide

Definition of terms, prerequisite requirements & your benefits as an employee.

Cycle to work and head to the countryside after work

Company bike leasing is in vogue because cycling is eco-friendly and healthy. It also makes the dream bike more affordable thanks to the leasing model and favorable tax regulations.

  • But what about tax on my company bike if I also want to use it in my private life?
  • What does the 0.25% rule imply?
  • And how does the company bike enable me to save tax?

We answer frequently asked questions and provide an overview of the key terms related to the taxation of company bikes.

Dienstradfahrer auf vollversichertem E-Bike

Tax on company bikes – the basics

Company bike vs. company car: similarities and differences in taxation

Pursuant to the tax decree issued by the federal states in 2012, the tax rules that apply to the provision of a company bicycle are similar to those for a company car. However, there are differences.

Elektroauto an Ladestation
Tax advantage for electric vehicles: 1% vs. 0.25% rule for company cars

The reduced tax on the monetary benefit depends on the way the company car is powered. While the 1% rule is applied to privately used company cars using a combustion engine, employees with electric company cars are taxed much more favorably: If certain conditions regarding the price and date of purchase are met, the 0.25% rule applies in this case. Instead of one percent, only a quarter of the list price is taxable as a monetary benefit each month, thus giving employees a real tax advantage.

Cargobikes und andere Diensträder profitieren von der 0,25%-Regel
The 0.25% rule: company bikes and electric company cars enjoy the same tax break

Whether it’s a classic bicycle, cargo bike or e-bike: Since 2020, company bikes enjoy the same tax breaks as do electric company cars. The only requirement is that the employee took over the bike as a company vehicle for the first time in 2019 or later. The 1% rule continues to apply to company bikes that were leased as a company bike before 2019.

Diensträder sind von der Besteuerung des Arbeitswegs ausgenommen
Company cars and company bikes differ in the way the commute is taxed

Anyone who regularly uses their company car to drive to work faces tax on the associated monetary benefit. For combustion cars, this is 0.03% of the gross list price per kilometer of the one-way journey per month, while it’s merely 0.0075% for electric cars. Company bike riders are clearly in the advantage, as their commute to work is not taxed at all. The only exceptions are S-pedelecs, i.e., e-bikes with pedal assistance reaching a speed of up to 45 km/h. Although the favorable 0.25% rule also applies to these speedsters if they are used as company bikes, the use for commuting to work is subject to tax just like a company car.

Tax, agreements, etc. – practical knowledge about company bikes

How exactly does the 0.25% rule work? How is my company bike taxed if I decide to keep it at the end of the lease term? And why do I need a Transfer Agreement? Find the answers below.

Sample computation: That’s how the 0.25% rule works

 

The monetary benefit provided in the form of a company bike is taxed according to the 0.25% rule. This rule stipulates that a small percentage of the gross list price of the bike is added to the employee’s taxable salary each month – namely 1% of the quarter of the RRP, rounded down to the nearest 100 euros. Does that sound confusing? Then take a look at our sample computation:

 

Manufacturer’s RRP: € 996.00 

Divided by 4 = € 249.00 (one quarter of the RRP)

Rounded down to the nearest full € 100 amount = € 200.00 

€ 200 Euro x 1% = € 2.00  

 

This computation shows: If you use a company bike with a list price of € 996, merely € 2 per month counts as additional salary, which is subject to taxation and social security contributions.

 Radhändler berät Kundin

When the lease expires: company bike tax if you decide to retain the bike

If you want to keep your company bike at the end of the lease term, you can usually do so. The amount due for the final payment depends on the price of the company bike. So, how is your leased bike taxed if you decide to retain it once the lease has expired? While the tax authorities assume a residual value of 40% of the RRP, you, as an employee, will usually be offered the bike at a takeover price of just 18% of the RRP. The difference between these two amounts is considered a monetary benefit. In this case, we at Bikeleasing-Service take care of the taxation, so that the transfer of the company bike remains tax-free for you as an employee.

 

Good to know: For tax reasons, you will receive a binding purchase offer for your company bike shortly before the end of the lease term.

Prerequisite requirements for tax breaks: the Transfer Agreement

 

The tax advantages of company bike leasing only apply if the employer, rather than the employee, is the contractual partner of the leasing company and the employee is thus also the lessee. The terms and conditions under which the employer provides the leased bike to the employee are then set forth in a Lease Agreement. This supplements the existing employment contract and defines provisions such as the monthly salary conversion amount.

Arbeitgeber bestimmt konkrete Bedingungen des Überlassungsvertrags

Good for you, your budget and the environment

Leave your car at home and ride a company bike from Bikeleasing-Service to reap a number of financial benefits:

  • Top bike at a top price – save up to 40 percent
  • Low net financial burden – thanks to salary conversion
  • Tax advantage – benefit from the 0.25% rule
  • Low-cost mobility anywhere, anytime – private use included

However, the tax break is only one of many advantages of company bike leasing through Bikeleasing-Service:

  • Say goodbye to hassle – commute without traffic jams or parking issues
  • Fit and healthy through extra exercise
  • Peace of mind – thanks to our scalable insurance coverage
  • Clear conscience ditch the car to reduce your CO2 footprint

Is that what you’re looking for?
We are happy to show you the way to your company bike.

Mountainbiker

Any questions? FAQs: company bike & taxes

For all frequently asked questions and answers, visit the Bikeleasing FAQs.
Bikeleasing FAQ

Discover more about bike leasing!

Arbeitgeber registriert sich am Mobilgerät bei Bikeleasing
Bikeleasing for employers

Company bikes are a popular benefit, helping your company shine as an attractive employer, motivate employees and achieve long-term employee retention. Minor effort, major benefit – that’s Bikeleasing for employers.

Arbeitnehmerin sucht online  Dienstrad aus
Bikeleasing for employees

A pleasant, eco-friendly and healthy way to get out and about while saving money at the same time – if you ride a company bike, you benefit from plenty of advantages. Discover Bikeleasing for employees.

Arbeitnehmerin holt Dienstrad bei Fachhändler ab
Bikeleasing for self-employed people

Company bike instead of company car – Bikeleasing enables self-employed people to acquire their dream bike at low cost. Learn more about Bikeleasing for self-employed people and freelancers.

Bikeleasing for bike dealers

No commission, no risk, but real customers – for our partner dealers, company bike leasing is absolutely straightforward and worthwhile. Learn how easy it is to become a Bikeleasing-Service partner dealer.

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