And one more current update at the end of the winter season, now that the snow and slush are bidding farewell. On 23 November 2012, the supreme tax authorities of the federal states issued a decree granting bicycles (including electric bicycles) the same privileged treatment as company cars. Background: With company cars, the employer pays, for example, the leasing rate, insurance, fuel, repairs, and so on. The employee is permitted to use the vehicle privately but must, in return, pay tax on the so-called "non-cash benefit". If the distance between home and place of work is not very long, the employee can receive a brand-new mid-range car including all running costs at a bargain price of, say, EUR 200 per month. If the employer agrees, employees can now also acquire a subsidised company bicycle. Employers can provide their employees with a great bicycle that they may, from now on, lawfully use for private purposes. So you can use the winter months to negotiate with your employer and may then enjoy your new ride right at the start of spring. It is worth noting that it makes no difference whether the employee actually uses the bicycle as a company bicycle, for example for trips to clients. For you as an employee, the whole arrangement costs little more than EUR 10 per month, taking a luxury electric bicycle of around EUR 3,000 as an example. Should your employer not be quite so generous, you can still save money thanks to the new regulation. The employer can, for instance, lease a new e-bike through the company without it costing them a single cent. In that case, the leasing rate is deducted directly from the employee's salary as part of a salary conversion arrangement (as has already been the practice for cars paid for by the employee). As an employee, you then benefit from the lower tax burden.
Frequently asked questions
Frequently asked questions
How have company bicycles been treated for tax purposes since the decree of 23 November 2012?
Under the uniform decree issued by the supreme tax authorities of the federal states on 23 November 2012, bicycles and e-bikes are treated for tax purposes in the same way as company cars. If the employer provides the employee with a bicycle for private use as well, the resulting non-cash benefit is taxable. Analogous to the 1% rule, the assessment basis is 1% of the manufacturer's recommended retail price, rounded down to the nearest full EUR 100.
Does the company bicycle actually have to be used for business purposes?
No, for the tax privilege it is irrelevant whether the bicycle is actually used for business trips (e.g. client visits). The only decisive factor is that the employer provides the bicycle to the employee and also permits private use.
How does salary conversion work for company bike leasing?
The employer leases the bicycle and provides it to the employee. The leasing rate is deducted directly from the employee's gross salary (salary conversion), so the employer incurs no costs. The employee reduces their taxable income and thus benefits from a lower tax and social security burden.
Which types of bicycles qualify for the company car tax privilege?
Both classic bicycles and electric bicycles (pedelecs) are covered. High-quality e-bikes with a list price of, for example, EUR 3,000 can therefore result in effective net costs of only around EUR 10 per month for the employee if the employer bears the costs.
What are the benefits of a company bike for employers and employees?
Employers can offer their staff an attractive, health-promoting benefit without incurring any costs of their own under the leasing model. Employees receive a bike on significantly more favorable terms, as only the non-cash benefit of 1% of the list price is taxed monthly – regardless of whether the bike is used for business or private purposes.