Collective agreement supports bike leasing in the public sector
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In an effort to keep jobs in the public sector attractive, salary conversion for company bicycles has been opened up to municipal employees. This was agreed by the ver.di trade union and the Association of Municipal Employers’ Associations (VKA) as part of the collective bargaining agreement concluded in October 2020. Specifically, the new arrangement will enable over 1.5 million public sector employees to take advantage of bike leasing.
Effective immediately, municipal employees are free to receive bicycles, e-bikes and pedelecs as benefits in kind by way of salary conversion. The benefit in kind for the provisioning of the company bike is not taxed on the basis of the full lease payment; instead, it is settled at a flat rate compliant with the company car rule, resulting in a significant tax break. This makes salary conversion an attractive option for both the employee and the employer. The conversion of the monthly gross remuneration helps reduce the employee’s income tax and social security contributions.
The collective bargaining agreement applies to all 16 member associations of the VKA, thus including the following municipal employers in each of the federal states:
- Cities, towns, communities, districts,
- Hospitals and care facilities,
- Savings banks,
- Utilities and waste management organizations,
- Local transport organizations,
- Airports.
We are pleased to see that the idea of sustainability is finding its way into more and more areas of life and that eco-friendly mobility is evolving into one of the fundamentals at the corporate level. The agreement once again confirms our vision: bike leasing can serve as an inexpensive, healthy and sustainable alternative to the classic company car. You can find more information on Bikeleasing in the public sector.
The official ver.di agreement is available here.
