Company bike leasing, also commonly known as job bike or service bike leasing, is an increasingly popular employee benefit model in Germany. In this arrangement, employers enter into framework agreements with leasing providers to enable their workforce to use high-quality bicycles or e-bikes. These bikes can be used for both commuting to work and personal trips. The concept not only promotes healthy and environmentally friendly transportation but also enhances the company's appeal as a modern and responsible employer. It positions the company as a promoter of sustainable mobility solutions and contributes to improving employee well-being.
The financing typically works through a salary sacrifice model. In this arrangement, the employee gives up a small portion of their gross salary, which is then used to pay the monthly leasing rate. This converted portion of the salary reduces both the taxable income and the assessment basis for social security contributions, creating financial benefits for both employees and employers. While the monetary benefit of private bicycle use must be taxed, a very favorable regulation has been in place for several years: Only 0.25 percent of the manufacturer's suggested retail price (MSRP), rounded down to the nearest 100 euros, needs to be reported as a taxable benefit each month. This makes leasing through the employer significantly more cost-effective than direct purchase. Alternatively, employers can provide the bicycle entirely as an addition to the employee's regular salary; in this case, the benefit is completely exempt from both tax and social security contributions (according to § 3 No. 37 of the Income Tax Act). The leasing contracts often include service packages for maintenance and insurance, making the use even more attractive and worry-free.
Implementation is usually straightforward for companies. After selecting a leasing partner, employees can choose their desired bike from participating specialist dealers. The leasing contract typically runs for 36 months. At the end of the term, there's often the option to either purchase the bike at a favorable residual value or simply return it. In summary, company bike leasing offers numerous advantages:
- For employees:Access to modern, high-end bikes at favorable rates, tax benefits that lead to financial savings, promotion of personal health, contribution to environmental protection, and full private usage rights.
- For Employers:Enhance employer attractiveness and employee retention, support workplace health promotion, strengthen sustainable corporate image - often implementable at neutral cost.
Company bike leasing is a flexible and contemporary benefit that fits perfectly into modern compensation and benefits packages, catering to employees' individual needs and values.