What happens when an employee with a company bike is terminated?
When an employee with a company bike is terminated, the lease agreement initially continues, since your company is the contracting party. As a rule, nothing changes until the employee’s last day of work: the salary conversion continues, and the bike remains in use. For the period afterward, there are four options: a change of user, an early termination by mutual agreement, a change of employer, or the return of the leased bike. Which option is appropriate depends primarily on whether the departing employee wishes to keep the bike and whether a purchase offer is possible. Your advantage as an employer: With Lease a Bike, these options are available for every departure.
Important note: This article outlines the procedures for terminating employees who have a company bike, but it does not replace tax or legal advice. It’s best to clarify the specific details with your tax or legal advisor.
The most important points at a glance.
Does the lease agreement end with the termination? No. It continues for the time being, since your company is the lessee.
Who pays the installments after the employee leaves? Your company owes them to the leasing company—until a follow-up arrangement takes effect.
What happens during the notice period? As a rule, the salary conversion continues until the last pay period.
What options are available afterward? Basically, there are four options: a change of user, an early termination by mutual agreement, a change of employer, or returning the bike.
Can employees keep the bike? Yes, by taking ownership after a termination by mutual agreement. If desired, they can finance the purchase price through FINANCE A BIKE.
What if the new company takes over the bike? In that case, the contract is amended following a successful credit check.
What about when an employee retires? The same four options apply—as well as when transitioning to self-employment.
What should you arrange in advance? The termination clause in the lease agreement. Important: You must not guarantee a buyout price in this context.
What happens to the lease agreement when employees with company bicycles resign?
Just under four in ten employees in Germany have been working at their current company for less than five years - according to figures from the Federal Statistical Office. So it’s not unusual for someone to resign in the middle of a lease term. The lease agreement remains unaffected by this for the time being. The reason: With company bike leasing, there are two levels of contracts. Your company enters into the lease agreement with the leasing company - generally for 36 months. Your employees, on the other hand, receive the bike under a bike-leasing agreement. This is usually a supplementary agreement to the employment contract and is therefore tied to the employment relationship.
When the employment relationship ends, only one of the two levels is terminated. The bike-leasing agreement typically ends, and with the final paycheck, the payroll deduction also ceases. Your company, however, continues to owe the lease payments to the leasing company - only now the salary from which they were previously deducted is no longer available. The four options we present below are designed to close precisely this gap.
Important note: Payment protection is not intended for this scenario. It kicks in when continued salary payments cease during an ongoing employment relationship - for example, in the event of a long-term illness or during parental leave.
What are the rules regarding the notice period up until the last day of work?
As a general rule, everything remains the same until the last day of work. The employment relationship continues, the salary is paid, and the lease payment is deducted from the gross salary as usual. Your payroll department will also continue to include the non-cash benefit as long as the bicycle is on loan. During this time, your employees generally continue to use it for both personal and business purposes.
You should take a closer look in the case of a leave of absence. If you continue to pay the salary, the conversion typically continues as well. Whether the bike remains with the employee during this time is best regulated by your lease agreement.
The notice period is, above all, your window of opportunity. Use it to take the following steps:
Clarify the employee’s preference: Ask early on whether the employee would like to keep the bike. This will determine which options are available.
Check the remaining term: How many of the 36 months are left? You’ll need this number for any follow-up solution.
Notify payroll: The conversion ends with the final pay stub. Your payroll department should be aware of the date.
Contact Lease a Bike: It’s best to contact us as soon as the employee’s departure is confirmed.
What are the options for the company bike after leaving the company?
To ensure you aren’t left stuck with the remaining payments after leaving the company, there are four options:
User Transfer: You transfer the bike to another employee for the remainder of the term. You arrange the transfer privately - for example, through a supplementary agreement.
Early Termination by Mutual Agreement: The lease agreement is terminated for a valid economic reason. The departing employee can take ownership of the used bike.
Change of employer: Following a successful credit check, the contract is transferred to the new employer. The employee keeps the bike for the remainder of the term.
Return: If none of the other options apply, the bike is returned to your company. We’ll then work out the details on a case-by-case basis.
Which option is best usually depends on two questions: Does the person want to keep the bike? And is there someone at the company who can take it over for the remainder of the term? In the event of a user change, the bike type and frame size must always be suitable for the new person. Additionally, they must be part of your eligible user group.
Can employees keep their company bike after they resign?
The options mentioned above show that yes, your employees can keep the company bike after leaving the company. Two of the four options lead to this outcome.
The first is taking ownership. If the lease agreement is terminated early by mutual agreement, the departing employee can purchase the used bike. The bike then belongs to them, and the lease agreement ends before the 36 months are up.
The second option is a change of employer. If the new company agrees, the contract is transferred to them. However, this requires a successful credit check. The employee then simply continues to ride the bike for the remainder of the term—just through the new employer. If they do not wish to keep the bike, the remaining options are a change of user or returning the bike.
Important: You must not promise a purchase price in advance, even in the event of termination. For the company bike to be treated as a lease for tax purposes—and not as a disguised installment purchase—the contracts must comply with the requirements of the so-called “Leasing Decree.” Your employees will therefore only learn the cost of the used bike once they receive a specific offer. There is no fixed price beforehand. Furthermore, there is no entitlement to a purchase offer or to acquiring the bicycle.
Voluntary resignation, mutual termination agreement, retirement: Does the reason make a difference?
As far as the company bike is concerned, the reason for leaving generally makes no difference. The only decisive factor is that the employment relationship ends before the 36-month period expires. The four options remain the same. The main differences lie in the timeline:
Voluntary resignation: The standard scenario. The notice period gives you and the departing employee time to find a follow-up arrangement.
Termination by your company: Works exactly the same way. If you’re unsure whether you’re allowed to require employees to share in the costs in this case, have the matter reviewed by a lawyer.
Mutual termination agreement: Here, you can address the company bike right away - for example, which of the four options should apply.
Termination without notice: This is where things get tight. There’s no notice period, so it’s best to contact us immediately.
Retirement and transition to self-employment: The same options apply. The advantage: Both situations are usually known well in advance.
By the way: If employees resign during parental leave or a long-term illness, not only does continued pay end, but so does the employment relationship itself. Even in these cases, the four options are available. Read more in the article “What Happens to the Company Bike During Parental Leave or a Long-Term Illness?”
How do you prepare your company for terminations involving company bicycles?
36 months is a long time - after all, a job change can happen at any time. That’s why you’ll save yourself the most hassle by taking care of things before the first notice of termination lands on your desk. It’s best to clarify these points in advance:
Lease Agreement: Specify in the agreement what applies in the event of termination- such as when the bike must be returned and what options are available. We recommend using our free sample lease agreement as a template.
Eligibility: There are no legal requirements regarding probationary periods or fixed-term contracts. If a fixed-term contract ends after twelve months but the lease agreement doesn’t expire until 36 months, the employee’s departure is foreseeable. Your criteria should be objectively justified and applied consistently.
Termination Process: Include the company bike on your offboarding checklist- right next to the laptop and keys. That way, it won’t get overlooked during the termination process.
Responsibilities: Specify who will speak with the departing employee, who will notify payroll, and who will contact Lease a Bike.
The figure from the beginning shows that this preparatory work is worth it: Nearly four out of ten employees have been with their current company for less than five years. Sooner or later, you’ll have your first employee leaving with a company bike. Once you’ve clarified these four points, the termination will become a routine matter.
Checklist: Have all the necessary arrangements been made when employees leave the company with a company bike?
Does your lease agreement specify what happens in the event of termination or resignation?
Is a buyout price guaranteed in any contract?
Have you already clarified early on whether the departing employee would like to keep the bike?
Do you know how many of the 36 months are still remaining?
Is a change in the user within the company a possibility?
Has it been clarified whether the new company would take over the contract?
Does your payroll department know when the salary conversion ends?
Have you informed Lease a Bike about the employee’s departure?
Is the company bike on your internal offboarding list?
Our author
Anna Veldtrup
Anna Veldtrup has been a team leader in the Customer Service and Claims Management department at Lease a Bike since 2024, and she and her team work every day to ensure the highest level of customer satisfaction and smooth operations. She loves nothing more than riding her gravel bike out in nature.