Both employees and employers benefit from the provision of a company bicycle. Where the bicycle is made available as part of a salary sacrifice arrangement, the employee must pay tax on 0.5% of the bicycle's list price, rounded down to the nearest 100 €, per month.
Example: List price 1,099 € Monthly taxable amount: 5 € This amount (5 €) is also subject to social security contributions.
An even more favourable outcome arises where the bicycle is provided in addition to the contractually agreed salary. In that case, the provision is free of both tax and social security contributions.
Commuting trips between home and the place of work do not need to be taxed in either case. The distance-based commuting allowance (Entfernungspauschale) is likewise not reduced.
In order to qualify for the benefit, the employee must not become the economic owner of the bicycle. The employer and employee must enter into a loan agreement.
The benefits also apply to e-bikes that do not require registration or compulsory insurance.