Buy or lease a company bicycle

What schemes are there for your company bicycle?

There are 4 different tax schemes for a bicycle, electric bicycle, or pedelec for your company:

• Company bicycle or lease bicycle
• Using part of the gross salary
• Allowance per kilometre
• Interest-free loan

The schemes you can use depend on your situation:

• You are a sole proprietor (zelfstandige zonder personeel, ZZP) and want to buy a company bicycle for yourself: you can make use of the Company Bicycle scheme, but not of the other schemes, because you are not an employee.
• You want to arrange a bicycle for your employee(s): you can make use of all 4 schemes.
• You are the director-major shareholder (dga) of your bv or nv (public or private limited company): this also makes you an employee, which means you can make use of all 4 schemes.

Company bicycle for self-employed professionals

You buy or lease a bicycle with your sole proprietorship (eenmanszaak). That is permitted if you will use the bicycle professionally for at least 10% of the mileage.

For income tax purposes, the additional tax liability is 7% of the suggested retail price of the bicycle. Here you can check the suggested retail price (in Dutch). As a self-employed professional, you add this 7% additional tax liability to your profit.

Deductable expenses for self-employed professionals

You can deduct the purchase price of the company bicycle from the profit with an annual amortisation (depreciation). You do this by amortising part of the price each year. See how you calculate the amount of depreciation.

In addition, you may deduct other expenses for the company bicycle. For example, the costs of bicycle insurance, repairs, or accessories.

Deducting VAT

You can deduct the VAT on the purchase cost and other bicycle expenses as input tax. If you also use the company bicycle for private purposes, you must determine how you deal with the VAT. Read more about VAT deduction in case of mixed use (in Dutch).

Company bicycle for your employees

You buy or lease a bicycle for your employees.

For the purpose of payroll taxes, the value of the bicycle is 7% of the suggested retail price. Here you can check the suggested retail price (in Dutch).

You add the additional tax liability to the gross annual salary of your employee. Over the amount of this addition, you withhold wage tax / national insurance contributions per tax period.

In addition, you pay the Netherlands Tax Administration employee insurance premiums and healthcare insurance contributions over the additional tax liability.

Calculation example

Keep the additional tax liability untaxed for your employee

The amount of the additional tax liability remains untaxed if you indicate that the amount is a final-levy wage(eindheffingsloon). In that case, the bicycle will cost your employee nothing. You can only do this if the cost remains below the ‘discretionary scope’ (the available limit, see the regulation: Work-related costs scheme). Otherwise, you will pay an 80% final levy on the amount of the additional tax liability. You must state the final-levy wage in each tax return period.

Read more about the discretionary scope and the final levy at 'Calculating the final levy under the work-related costs scheme' in the Payroll Taxes Handbook (handboek loonheffingen, in Dutch).

Deductible expenses for employers

Because you pay for the bicycle for your employee, you can deduct the costs from the profit. You do this with an annual depreciation. Find out how to calculate the amount of depreciation (in Dutch). VAT is deductible for a maximum of € 130 if you meet the conditions. This means that you may deduct the full VAT for a bicycle of €749 (incl. VAT) or less, if:

• you buy or lease a bicycle for your employee for the first time;
• your employee does not receive any other allowances for commuting;
• your employee does not pay a personal contribution for the bicycle.

In other cases restrictions apply. Read more about the conditions and view examples of permitted deductions for employee benefits (in Dutch).

Using part of the gross salary

With the gross / net allowance, your employee pays portion of their gross income. For that portion, they receive an allowance to buy a bicycle. You indicate this allowance as the final-levy wage. You do not pay tax over this, as long as you stay within the discretionary scope of the work-related costs scheme. Because the amount is deducted from the gross salary, you and your employee pay less wage tax and premiums.

Calculation example

Tax-free kilometre allowance

Your employee can also finance the bicycle with a tax-free kilometre allowance. In that case, you reimburse your employee per commuted kilometre commuting. Reimbursements of up to €0.23 per kilometre are untaxed in 2024.

Interest-free loan

You lend your employee an amount to buy a bicycle. Because your employee repays this amount, it is not deducted from the discretionary scope. The employee can also repay the loan with the untaxed kilometre allowance.

Example

You lend your employee €1,500 for a bicycle. They will receive a €0.15 kilometre allowance for a home-work journey of 4 kilometres. That is a compensation of €1.20 per working day. They then repay the loan in about 5 years.