Tax matters

You can offer company bicycle leasing in your company as an employee benefit. With Lease a Bike you enable your employees to quickly and easily lease their dream bike. Thanks to wage conversion, the wish wheel is paid monthly via the gross salary and your employees save on social security contributions and taxes. As an employer, you benefit from stronger employee loyalty and healthier employees, for example. You also contribute to sustainable mobility. You can also find more information here.

Since 2012, the company car principle has also been applied to bicycles and e-bikes. Company bike leasing increases productivity, promotes health and has been proven to reduce employee sick days. As an employer, you can implement the offer free of charge and risk.

The advantageous salary conversion and the comprehensive all-round protection make the concept of bike leasing interesting for both employers and employees, thereby enhancing the company's image. Company bicycle leasing is now the most popular benefit for employees. Other benefits include reduced turnover, increased employee satisfaction and a positive contribution to the company's environmental footprint.

With Lease a Bike you also benefit from an extra portion of customer service. We are here to help you with the implementation and all questions related to e-bike and bicycle leasing with our first-class customer service. From a personalised online portal to personal on-site support. Find out more about the benefits for your company here.

When the salary is converted, the employee receives part of the contractually agreed salary not in cash, but in kind for the period of the secondment of the service.

In other words, an amendment is made by means of an additional agreement to the employment contract, in which the future salary of the employee is reduced by a fixed amount (conversion rate) for the duration of the loan. This then results in the tax and contribution advantage for the employees. In addition, in most cases the monetary benefit is taxed. This is added to the gross monthly salary. What exactly does that mean?

Gross monthly salary

+ taxation of imputed income

- Conversion rate

- All-round protection costs

= new gross monthly salary

- Taxes

- Taxation of imputed income

= net monthly salary

If you now compare the net monthly salary without the company bike with the net monthly salary with the company bike, you get the monthly costs for the company bike leasing.

Below you will find some explanations of terms.

Conversion rate:

The conversion rate is the sum of the leasing rate and the cost of the selected all-round protection package, less any cost coverage by the employer The gross monthly salary is reduced by this conversion rate.

Taxation of the monetary advantage:

Depending on the form of provision by you as the employer, the use of the service bike is subject to taxation of the monetary benefit. In the event that a service bicycle is made available for unrestricted private use in the context of a salary conversion, the cash benefit must be taxed. The cash benefit of the company bicycle leasing is calculated at a flat rate of 1% of a quarter of the gross list price (GBP) rounded to the full 100€, added to the taxable income and taxed with it. Colloquially speaking, there is also a 0. 25% tax. The amount for the cash benefit can be found in the calculation overview on the calculator page.

The implementation of company wheel leasing is cost-neutral. As an employer, you can make use of our payment protection in the event of continued salary payments being discontinued. This happens, for example, if employees are ill for longer than 42 days and receive sick pay or go on parental leave. Lease a Bike takes over the leasing installments for a maximum period of 12 months, but only if the leasing contract has already been running for 6 months. In any case, we will always work with you to find the best solution - right up to the individual, cost-neutral return of the company bike for you as the employer.

As a rule, employees lease via deferred compensation. A small portion of the gross salary is withheld as a leasing installment. This "remuneration in kind" must be taxed monthly at 0.25% of the gross list price. This does not incur any costs for the company.

As an employer, you can reduce the monthly conversion rate with a voluntary subsidy, for example through the fair amount. When the fair amount is applied, employer-side savings in social insurance that arise from deferred compensation are passed on to the employees, so that their savings from leasing are even higher than with classic deferred compensation.

You can also pass the company bike on to employees as a salary bonus, in which case you pay the monthly leasing installments. In this case, employees do not have to pay tax on the non-cash benefit for private use.

• Three months before the end of the leasing contract, employees will receive an e-mail informing them of the end of the leasing period. In addition, we will check in good time before the end of the leasing contract whether it is possible to make your employees an offer to purchase the company bike. If this is the case, your employees will receive such a purchase offer from us by e-mail at least three months before the end of your leasing contract.

• After accepting the purchase offer, employees receive an invoice on which the taxation of the monetary benefit arising from the purchase is confirmed in accordance with EStG §37b para. 1 with takeover by us (flat-rate taxation by third parties).

• Employees can pay the purchase price by direct debit, Klarna Pay Now, Sofort Überweisung, credit card and PayPal. At the end of the leasing contract, ownership of the bike is transferred to you.

• Your company will receive an annual overview of all bikes taken over and the corresponding proof of the transfer of the non-cash benefit in accordance with EStG §37b para. 1.

If you do not wish to purchase the bike, we can arrange for it to be collected from the user or the company.

You can make use of our installment loss protection in the event of continued salary payments being discontinued.

This happens, for example, if employees are ill for longer than 42 days and receive sick pay or go on parental leave. Lease a Bike takes over the leasing installments for a maximum period of 12 months, provided the leasing contract has already been running for 6 months.

In any case, we will always work with you to find the best solution - right up to the individual, cost-neutral return of the company bike for you as the employer, unless one of the following options is possible.

These can be:

• Change of user: You offer the company bike to another employee for the remaining term of the contract and take all necessary internal measures (e.g. supplementary agreements to the employment contract, handover of the company bike).

• Premature termination of the existing leasing contract by mutual agreement for important economic reasons with possible takeover of the used company bike by the employee. The employee also has the option of financing the purchase price via our FINANCE A BIKE product.

• In the event of a change of company, the existing leasing contract can be transferred to a new company. After a credit check, the contract will be continued by the new company with all rights and obligations and the company bike will continue to be provided to the employee for the remaining term.

Company managers can submit a request for the above options via the Lease a Bike portal.

If one of your employees leaves the company and has a Lease a Bike company bike, we offer you the following options.

Contract transfer of the company bike to a new employee:

You can offer the remaining company bike to another employee for the remainder of the leasing term. As the employer, you take all the necessary internal measures (e.g. supplementary agreements to the employment contract, handover of the company bike, etc.) and ensure that the new user is registered in the Lease a Bike portal. Lease a Bike takes care of the name transfer. The transfer is free of charge.

Early termination of the leasing contract:

The employee or you as the employer have the option of buying the leased asset out of the leasing contract. Ownership of the leased asset is transferred after purchase. The employee also has the option of financing the redemption amount via the FINANCE A BIKE product. This requires online banking access and a valid identity card with German citizenship.

Transfer of the leasing contract to the new company:

Subject to a credit check, the leasing object is contractually transferred to the new company. The new employer now has the option of converting the existing leasing contract into a salary conversion and continuing to provide the employee with the leased object as a company bike. The prerequisite for this is a declaration of consent from the new company and registration with Lease a Bike. The transfer is free of charge.

Company managers can submit a request for the above options via the Lease a Bike portal.

The all-round protection package consists of one option each for theft and damage protection, an inspection option and a wear and tear budget option. Users select the options according to their individual requirements and can combine the different variants with each other to configure their individual all-round protection package.

The following options are available as standard:

Theft and damage protection: Premium or All-inclusive

Inspection: Basic, Premium or All-inclusive

Wear and tear: Basic, Premium or All-inclusive

Example: If the user selects the all-inclusive option for theft and damage protection, they do not necessarily always have to take the all-inclusive option, but can also combine the basic inspection option with the premium wear and tear option, for example.

The user selects one option each for theft & damage protection (incl. free Europe-wide mobility guarantee), inspection and wear and tear and thus configures the all-round protection package according to their individual requirements. Accordingly, each all-round protection package includes theft and damage protection as well as a budget for inspection and wear and tear.

Our theft & damage cover includes all sudden and unforeseeable damage or destruction to the leased object, e.g. due to:

• theft, burglary or robbery
• operating errors
• Simple negligence
• accidental damage
• vandalism
• Design, material or workmanship defects
• Overvoltage, induction or implosion
• Storm, frost, ice, earthquake or flooding
• Damage to the motor or battery

Please note which theft and damage protection option the user has chosen: If the user has selected the all-inclusive option for theft and damage protection as part of the all-round cover, the new value insurance applies. The Lease a Bike company bike is then insured against theft around the clock if the company bike was locked. It will be replaced at replacement value and an object exchange will be made in the existing contract. As a rule, it is not necessary to terminate the existing contract.

If the user has selected the premium option for theft and damage protection as part of the all-round cover, the current value insurance comes into effect. The Lease a Bike company bike is then insured against theft around the clock if the company bike was locked. However, the leasing contract is then terminated and the bike is not replaced.

The company bike and company car can also be used at the same time. The 1% method then applies to both the company bike and the car.

In contrast to the company car, employees do not have to pay tax of 0.03 percent per kilometer for the journey to work.

Electric bicycles with a motor that provides assistance at more than 25 km per hour are classified as motor vehicles under traffic law and the non-cash benefit is assessed in the same way as for a company car.

Note: For company bicycles, the assessment basis for the taxable non-cash benefit is quartered and rounded down to the nearest hundred. This corresponds to 0.25% taxation.

The commuting allowance for journeys between home and work is generally to be granted at € 0.30/km regardless of the means of transportation (Section 9 (1) No. 4 EstG).

The leasing installments for company bicycles are considered business expenses for business management purposes. This means that companies entitled to deduct input tax can deduct the VAT included from the conversion rate. The employees then convert the net leasing installments, resulting in even greater savings.

Companies that are not entitled to deduct input tax, on the other hand, convert the leasing installment including VAT, so that the savings for the employees are somewhat lower.