The Bicycle Plan: tax benefits for employees and employers

Rain or shine. Heading straight into a headwind or flying with the wind at your back. Electric-powered or fueled pure horsepower from your own legs. In the Netherlands, you are nowhere without a bike. Instead of buying a bicycle for commuting yourself, you can take advantage of the bicycle plan to lease a bike affordably. The main benefit? There are many, but the most important is that the cost of your bike is significantly lower than when buying it outright. Through Alleo, your employees can also arrange their lease bikes effortlessly.  

What is the bicycle plan?

The government introduced the bicycle plan in January 2020 with the aim of making cycling to work more appealing. The scheme ensures that the costs for a lease bike fall outside the Work-related Expenses Scheme (WKR). This opens up various tax benefits, allowing employees to lease a top-tier bike for a fraction of the retail price (up to 80% lower). By the way, the electric bike plan can perfectly coexist alongside a lease car. They are not mutually exclusive.

Bicycle plan advantages

The bicycle plan offers fantastic benefits for both employees and employers:

• The bicycle plan can be introduced cost-neutrally for the employer. For employers, this translates to reduced social security contributions, as no contributions need to be paid on the gross salary used for the lease bike.

• The bicycle plan features low costs for the employee. This is because the employee benefits from a gross-to-net tax advantage when leasing the bike.

• Since January 1, 2020, the bicycle plan is no longer part of the WKR, meaning you are less likely to hit the limit of your tax-free budget.

• The bicycle plan boosts employee health and happiness. The result? Higher productivity and outstanding quality of work.

• The bicycle plan is a highly sustainable choice compared to a (lease) car or public transport.

How does the bicycle plan work?

As mentioned above, the bicycle scheme was introduced in January 2020. Under this plan, the costs for the lease bike can be deducted from the gross salary. Consequently, less tax is paid over both the gross salary and the lease bike. This is how you finance the bike with a solid tax benefit.

An example of the bicycle plan

An employee decides they want to commute to work on an electric bike and proposes the idea to their employer. Together, they select an e-bike through a leasing partner. The monthly leasing costs consist of the amount for the bike plus service and maintenance. Thanks to the bicycle scheme, a portion of these costs is paid directly from the gross salary, usually around 15% to 20%. Because of this reduction in gross salary, the employer ultimately pays less tax and social security contributions on the wages. A win-win.

Reducing social security contributions

Thanks to these tax advantages, the employer can decide to reinvest the tax savings back into financing the bike, thereby paying the exact same gross salary for the employee – now with a bike included. The employee finances the remaining portion, but the costs are still much lower than a private lease.

This allows the employer to cover a portion of the lease bike at zero extra cost, giving the employee a 'free' discount on their lease amount. This makes it a complete no-brainer of an employee benefit.

The Bicycle Plan and the WKR

As mentioned earlier, the lease bike has fallen outside of the Work-related Expenses Scheme (WKR) since January 2020. This applies regardless of whether the employer contributes to the leasing costs or not.

Why does the bicycle plan fall outside the WKR?

Because there is no direct transfer of ownership between the employer and employee, the bicycle plan stays outside the WKR. Under the scheme, the employer doesn't hand over the bike directly; instead, its financing is effectively loaned.

How does the bicycle plan work with the WKR?

If you arrange a lease bike within the WKR, you quickly exhaust your tax-free budget. This limits your ability to offer lease bikes to all employees or use your WKR for other perks. The new government regulation ensures the lease bike falls outside the WKR, with the amount deducted from the gross salary instead. Furthermore, there is no longer a cap on the purchase price of the bike. Companies can set their own 'rules of the game.' Which bikes employees can choose from can depend on things like contract duration or salary.

Bicycle plan terms and conditions

The terms of the bicycle plan are determined by the employer. There are no longer statutory regulations dictating who pays what; that is up to the employer to decide. There is also no maximum limit on the bike's price. Because the costs bypass the WKR, there is no cap on how many bikes can be leased per company. In short, the new regulations bring immense benefits.

Bicycle plan vs. bike lease: which is the best choice?

The choice between a traditional bicycle plan and a bike lease depends heavily on personal preferences, financial situations, and the employer's available WKR budget. If you prefer to own the bike directly and have the budget to finance it, a bicycle plan might be best. However, with the increasing limitations of the WKR, a bike lease serves as a highly attractive secondary benefit due to spread costs and included services like maintenance and insurance.

A bicycle plan for your employees? Discover the possibilities!

For employers, the bicycle scheme is an incredibly attractive secondary benefit to offer. The bicycle plan is completely cost-neutral for the employer, while the employee enjoys a premium leased bike at a discount.

Thanks to our partnership with Lease a Bike, you can offer your employees a lease bike directly through Alleo. Together with Lease a Bike, we help build healthier, more productive teams—delivering value that benefits both employees and employers alike.

Ready to introduce the bicycle plan to your company? Book a demo with one of our employee benefits specialists.

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