What's the situation regarding bicycle leasing and the mobility budget?

As an employer, your aim is to respond as effectively as you can to your employees' mobility needs. The mobility budget now provides a very attractive solution, but it also gives rise to a whole load of questions.

Can your employee also lease a bicycle via gross salary sacrifice while also benefiting from the mobility budget? What is better value: leasing a bicycle via the mobility budget or in the form of flexible remuneration? And can you combine bicycle leasing via gross salary sacrifice with bicycle leasing via the mobility budget?

Our experts have investigated these questions for you, so that you can get most out of your mobility plan by having access to the correct information.

What is the mobility budget?

Before we take a more in-depth look into the relationship between bicycle leasing and the mobility budget, it is important first of all to have a clear picture of what the mobility budget involves.

By taking advantage of the federal mobility budget, employees can swap their company car for alternative transport solutions. These include electric cars, shared cars, leased bicycles or a railway season ticket.

And that's great, because this allows employees to align their mobility more closely to their personal needs and preferences. In specific terms, they can swap their company car for one of the three pillars below.

The three pillars of the mobility budget

Pillar 1: an environmentally friendly company car

If your employees opt for Pillar 1, they can swap their ordinary company car for an environmentally friendly company car. What's the requirement? The CO₂ emissions of the new car must not exceed the CO₂ emissions of the company car the employee has just exchanged and must also not exceed the absolute upper limit of 95 g/km. From 2026 onwards, the car will need to be completely emission-free.

Pillar 2: sustainable mobility and housing costs

From public transport and shared mobility to leased bicycles and a bicycle allowance – loads of choice! Housing costs consist of the rent or mortgage payment for your home.

Pillar 3: cash option

Isn't your employee making use of the mobility budget? Or is some of the budget still left over at the end of the year? If so, they will receive a cash payment for that amount at the end of the year.

Bicycle leasing in a nutshell

In simple terms, bicycle leasing is an attractive fringe benefit that gives employees the chance to lease a bicycle through their company for a certain period (3 to 4 years in most cases). But how exactly does this work? And what are the benefits for the employer and the employee? You can find the answers to these questions in our blog ‘What is bicycle leasing’, where we explain everything right down to the fine details.

5 questions about bicycle leasing and the mobility budget

It's now clear what exactly is meant by the mobility budget, but how does bicycle leasing actually relate to that mobility budget? Is it easy to combine the two? And what is the most attractive option for your employees?

1. Can all my employees make use of bicycle leasing via the mobility budget?

The mobility budget is only available for employees who are entitled to a company car. If you want to offer bicycle leasing to all your employees, you will in many cases need to set up a separate plan for employees without a company car, alongside the mobility budget.

Offering a bicycle plan of that type is actually extremely simple via o2o Bicycle Leasing. We will put together a tailored bicycle policy for your organisation and our intuitive tools and enthusiastic experts will take care of everything throughout the entire process.

2. Can my employee also lease a bicycle via gross salary sacrifice while also benefiting from the mobility budget?

Once a mobility budget is activated, your employee can no longer opt for bicycle leasing via flexible remuneration. But there is actually an interesting exception to this. Anyone who has had a leased bicycle for at least three months before applying for the mobility budget can continue leasing it while also benefiting from the mobility budget.  

What is more, leasing a bicycle while also benefiting from the mobility budget will then become an acquired right. What that means is that once your first contract has expired, you can then take out a second lease contract with the relevant tax benefit.

Why would your employees do that? Because in many cases, bicycle leasing via gross salary sacrifice is more attractive from a taxation point of view than bicycle leasing within the mobility budget. The reason for this is that in the case of bicycle leasing via gross salary sacrifice, the lease price is reduced by the employer's contribution that the employer is then able to save. This makes the leased bicycle up to 40% cheaper than if employees where to buy one privately for themselves.

3. From a budget perspective, what is more advantageous for my employees: leasing a bicycle via the mobility budget or via gross salary sacrifice?

We're glad you asked that question! As an employer of course, you want to make sure that your employees can flex their salary in a way that is most beneficial to them. After looking into this, our experts came to the conclusion that in most cases, your employees will enjoy the biggest tax advantage if they lease a bicycle via gross salary sacrifice.

How can that be?

As we already stated above, by sacrificing part of their gross salary, the lease price that your employees will pay for the bicycle will be reduced by the employer's contribution and social security contribution that you will save as an employer. To explain how this makes bicycle leasing more beneficial from a tax perspective than leasing via the mobility budget, we will present a sample calculation below.

Example: For a bicycle with a lease price of 100 euros, the employee must effectively sacrifice 100 euros of mobility budget via the mobility budget. To receive the same bicycle via gross salary sacrifice, your employee will only need to sacrifice 68.34 euros, due to the deduction of the employer's contribution (calculated at 28%).

4. Is the mobility budget the best incentive to opt for a leased bicycle?

Within the mobility budget itself, there are a large number of attractive choices for your employees. In many cases, anyone who opts for a more sustainable company car in Pillar 1 will not have sufficient budget left over for a high-quality leased bicycle. Employees who choose not to have a company car, have a large number of options within Pillar 2. Nevertheless, research has found that the mobility budget is used most frequently in order to pay off the rent or a loan. On a practical level, we can see that in 2023, 77% of employees used the mobility budget to fund their housing costs. Opting for more sustainable mobility is therefore not as great an incentive in all cases. Do you want to do more to encourage more sustainable mobility? If so, give your employees the option to lease a bicycle via gross salary sacrifice first of all and only then to sign up for the mobility budget. That way, they will enjoy the best of both worlds, because that is the only way of combining the mobility budget with bicycle leasing via gross salary sacrifice.

5. What's the situation regarding the bicycle allowance and the mobility budget?

If your employee opts for a company bicycle from Pillar 2, they cannot combine that with a kilometre allowance. There is one exception in this case: employees who fulfil the following conditions will retain the right to receive their bicycle allowance:

• employees who previously were already entitled to a company car and a bicycle allowance from the employer,
• who regularly commuted between home and work and received a bicycle allowance for that purpose, and
• did so for an uninterrupted period of at least three months before applying for the mobility budget.

Conclusion: bicycle leasing and the mobility budget

The mobility budget is a good incentive for your employees to swap their car for a more economical car or a different form of mobility. It ensures that employees will actually stop and consider their choice of mobility and think about what they actually need. Nevertheless, a number of restrictions will apply if employees want to use the mobility budget for bicycle leasing. Why? Because there has to be sufficient budget. Often, that simply isn't the case, as there are too many alternatives that have an effect on the net expenses incurred by employees.