The Netherlands is a cycling country, and cycling to work is becoming more and more popular. This makes sense, there are plenty of reasons to cycle with those high fuel prices. Also great for some exercise after a long day at the office. As a good employer, you want to attach your employees through fringe benefits. A company car is already quite normal, but why not a company (electric) bike?
Company bike for employees
Your Dutch employer can offer a company bike in various ways:
- Compensation for the purchase of the bike
- You get the bike
- Your employer provides a bicycle you can use
In the first two situations, the employee becomes the owner of the bicycle. In that case, the bicycle or the compensation is seen as wages, on which the employee pays tax. In the third situation, the employer still owns the bicycle, but your employee may use it indefinitely.
Addition (bijtelling)
If your employer provides you with a bicycle as an employee, you may also use it privately. The Dutch tax authorities call this benefit in kind. Therefore, they calculate a 7% addition on the purchase value of the bicycle (in Dutch: bijtelling). Employees have to pay income tax on this 7 percent (the regular rate). You can actually compare a company bike with a company car. But for a company bike, you always pay the additional tax, even if the bicycle is only used for commuting.
Calculation example
Imagine that your employer offers a cycling plan. As an employee, you can use an electric bicycle with a purchase price of € 2500. Sounds good, but what are you going to pay for it? The addition for the bicycle is (7% on €2500) €175 per year. In this example, we assume that your income falls in the first bracket (in 2022, the tax rate is 37.07%). You pay €64.87 annually for the company bike (this amounts to approximately €5.40 per month).
No tax-free travel allowance
As you can see in the example above, the big advantage is that you get an (electric) company bike for a very low price, which you can also use privately. Think of trips to the supermarket or bike rides, everything is possible. However, a disadvantage may be that your employees no longer receive a tax-free travel allowance for commuting.
For employers: tax deductions
You pay the company bicycle for your employee. Therefore, as an employer, you may deduct the depreciation costs of the bike from the profit. In addition, the VAT is deductible up to a maximum of €130, but you must meet the following conditions:
- you buy (or lease) a bicycle for your employee for the first time
- you do not pay any other reimbursements for commuting (such as tax-free kilometer allowance)
- your employee does not pay a personal contribution for the bicycle
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