A company bike or (electric) bike can be provided by the employer for commuting. The employee does not have to buy a bicycle and can use the bicycle of the company for unlimited private use.
The Netherlands has a reputation as a bicycle country. It should surprise no-one that company bicycles are a popular means of transport. Bicycle use is widespread in the Netherlands. 27% of all journeys are made by bike and more than half of all trips by car are less than 7.5 kilometres. Most employees would find this an acceptable distance to cycle. The company bike scheme also could make make cycling for longer distances an option.
The company bike scheme has several tax benefits for entrepreneurs. There are 4 different company tax schemes for a bicycle or electric bike:
- Company bicycle or lease bicycle;
- Using part of the gross salary;
- Mileage allowance per kilometre;
- Interest-free loan.
In regard to the company bike: The employer pays the bicycle and usually also the costs for maintenance and repair. The employee pays the income tax on the value of the bike. The tax is 7% over the recommended retail price of the bicycle and accessories (including VAT) per year. The employee will pay this tax per month, visible on the payslip.
- The employer may ask the employee for a monthly personal contribution. This amount will then be deducted from the tax, however this is up to company decision.
- The employer may also choose to pay the monthly tax. This is only possible by using the Work Related Expense scheme [WKR -Werkkostenregeling]. In that case the employee does not have to pay tax at all.
Please note: in case the employee uses a company bike, certain travel allowances are not applicable, such as the mileage allowance of EUR 0.19 per kilometre.
In need for more information on employee benefits in the Netherlands? Contact us.