0.25% rule for company bicycles and e-bikes

January 19, 2020

The subsidy for company bikes has been adjusted again so that riding a company bike is now even more favorable for the employee. The highest tax authorities have ensured that the assessment basis for the taxable non-cash benefit for private use is now divided into quarters.

All you need to know at a glance

What does this change mean in concrete terms?

For employees who have been using a company bike since January 1, 2019, the assessment basis for the taxable non-cash benefit will be quartered as of January 1, 2020. If an e-bike worth €2,599 previously had to be taxed at €12 (0.5%) for private use via salary, now only €6 (0.25%) is to be taken into account for flat-rate taxation.

How long will this regulation apply?

The new regulation applies from Jan. 1, 2020, for company bikes first provided since Jan. 1, 2019, until Jan. 1, 2031. However, the change does not apply retroactively to company bikes taxation in calendar year 2019.

In numbers, this means:

Start of transfer of use before Jan. 1, 2010.

Calculation for the total leasing rate
Assessment basis = EIA	€ 2.599
rounded off to the nearest 100	€ 2.500
thereof taxable 1%	€ 25

Start of the transfer of use as of 01.01.2019

Calculation for 2019
halved tax base	€ 2.599/2 = € 1.299,50
rounded off to the nearest 100	€ 1.200
of which taxable 1%	€ 12
Calculation from 2020 for the remaining term
one quarter of the assessment basis	€ 2.599/4 = € 649,75
rounded off to the nearest 100	€ 600
of which taxable 1%	€ 6

woman standing near bike path with bike and looks to the back

Start of the transfer of use as of 01.01.2020

Calculation from 2020 for the entire term
one quarter of the tax base	€ 2.599/4 = € 649,75
rounded off to the nearest 100	€ 600
of which taxable 1%	€ 6

Conclusion

Taxation of company bicycles reduced

In summary, this means that adjusting the assessment basis for the taxable monetary benefit has significantly reduced costs for employees.

Calculate your savings in the leasing calculator.

FAQ

: 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. You can find more detailed information on this topic in our blog article "A company bicycle and a company car at the same time? Here's how it works!".

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: In the case of a company bike, 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).