7 frequently asked questions by HR about the bicycle allowance

De fietsvergoeding: een interessant nettovoordeel voor werknemers, een veelbesproken topic onder werkgevers en HR-verantwoordelijken. Zit je ook met vragen over de fietsvergoeding? Dan ben je hier op de juiste plek, want we behandelen in deze blog de meestgestelde vragen van HR over de fietsvergoeding.

1. Is a bicycle allowance compulsory?

Are you obliged to pay out a bicycle allowance to employees who commute by bicycle? Since May 2023, employers in the private and non-profit sectors are obliged to pay a bicycle allowance to employees who regularly come to work by bicycle.

The bicycle allowance applies to any type of bicycle and to anyone using their own bicycle, a lease bicycle or a company bicycle. As an employer, you are not obliged to pay the maximum tax-free amount (€0.35/km). The actual basic amount you must pay will depend on the Collective Labour Agreement to which you are subject.

Would you like to know more about the bicycle allowance? Group S wrote a clearly presented article on the legal situation that applies.

Why, as an employer, would I pay more than the basic allowance?

Why give more than the statutory minimum? Because it is an attractive net benefit of course! What is more, the bicycle allowance actively encourages employees to travel by bicycle when commuting. More people commuting by bicycle will also provide an immediate solution to your parking problems. And cycling to work not only makes people less stressed, but is a valuable form of exercise too! So by paying the bicycle allowance, you are making a direct investment in your employees' health.

What is more, paying the bicycle allowance is also of benefit to you as a company. Find out why by reading item two below. All the more reason therefore to pay your employees the maximum bicycle allowance of €0.35 per kilometre.

2. What is the cost of a bicycle allowance to the employer?

As an employer, you can enter the bicycle allowance of up to €0.35 per kilometre as a 100% deductible business expense. This in turn reduces your operating profit and therefore your corporation tax, which represents a considerable benefit to the company. In addition, the bicycle allowance is also exempt from national social security premiums.

So is the bicycle allowance beneficial to the employer? Certainly! Taking advantage of the bicycle allowance is actually a tax-effective way to encourage your employees to commute by bicycle. So there's no reason not to do it, is there?

3. At what point should you start paying the bicycle allowance?

How often must employees travel to work by bicycle before you pay them a bicycle allowance? That is for you to determine yourself as an employer or member of the HR department. Most companies opt for the 20% rule. That means that employees working full-time are expected to commute to work by bicycle at least once a week. 

But you can also base this on a number of days per month, or you can even adjust the payment of the bicycle allowance according to the seasons. Because in summer, everyone is only too happy to jump on their bicycle, while in the cold winter months, cycling is often a less inviting prospect. How do you keep track of all this? Find out by reading item five below.

Important fact: remind your employees to claim their bicycle allowance for the number of kilometres travelled by bicycle, so that they do not need to pay any tax on benefits in kind on their lease bicycle.

Can you combine other mobility allowances with the bicycle allowance?

In the majority of cases, you can easily combine a bicycle allowance with other mobility allowances such as those for the company car or public transport. Some CLAs state that a company car cannot be combined with a bicycle allowance. It is therefore important that you check the CLA to see if it contains specific agreements.

4. To which route does the bicycle allowance apply?

What if your employee doesn't take the shortest route to work? Sometimes, the shortest route isn't actually the safest, or your employee makes a small detour to drop the children off at school. What should you do as an employer in that situation: are you allowed to pay an allowance for those additional kilometres?

Certainly! Your employee doesn't necessarily have to take the shortest route to work, and most definitely not if that isn't actually the safest route. You can therefore pay your employee the bicycle allowance for a route that is longer than the shortest route.

5. As an employer, how do you keep a record of the number of kilometres cycled?

As a company, how can you keep a record of the number of kilometres employees have cycled in a way that is easy and also correct? The precise way this should be done is not laid down by law. We are however noticing that companies are choosing to make use of one of the options below:

●       Digitally recording the number of kilometres cycled linked to an electronic access control or a cycling calendar.

●       Requiring employees to sign a one-off, solemn declaration, in which they state how often they cycle and the number of kilometres between home and work.

6. As an HR manager, can I operate a system of flat-rate allowances?

Operating a system of flat-rate allowances for the bicycle allowance is not possible. The bicycle allowance is only exempt from tax if it is specifically granted in return for using a bicycle when travelling between home and work. That is the reason why the bicycle allowance must also be calculated based on the journeys actually completed.

7. What must employees receiving the bicycle allowance take into account when completing their tax return?

In order to receive the exemption from tax and social security contributions, a requirement was introduced on 1 January 2024, stating that employees must not state their actual professional expenses on their income tax return. If they want to benefit from the exemption, employees will therefore only be able to state the standard rate of professional expenses on their income tax return. If not, the bicycle allowance will be taxable at the progressive rates, together with the employee's other professional income (VAA).

To which route does the bicycle allowance apply?

What if your employee doesn't take the shortest route to work? Sometimes, the shortest route isn't actually the safest, or your employee makes a small detour to drop the children off at school. What should you do as an employer in that situation: are you allowed to pay an allowance for those additional kilometres?

Certainly! Your employee doesn't necessarily have to take the shortest route to work, and most definitely not if that isn't actually the safest route. You can therefore pay your employee the bicycle allowance for a route that is longer than the shortest route.

5. As an employer, how do you keep a record of the number of kilometres cycled?

As a company, how can you keep a record of the number of kilometres employees have cycled in a way that is easy and also correct? The precise way this should be done is not laid down by law. We are however noticing that companies are choosing to make use of one of the options below:

●       Digitally recording the number of kilometres cycled linked to an electronic access control or a cycling calendar.

●       Requiring employees to sign a one-off, solemn declaration, in which they state how often they cycle and the number of kilometres between home and work.

6. As an HR manager, can I operate a system of flat-rate allowances?

Operating a system of flat-rate allowances for the bicycle allowance is not possible. The bicycle allowance is only exempt from tax if it is specifically granted in return for using a bicycle when travelling between home and work. That is the reason why the bicycle allowance must also be calculated based on the journeys actually completed.

7. What must employees receiving the bicycle allowance take into account when completing their tax return?

In order to receive the exemption from tax and social security contributions, a requirement was introduced on 1 January 2024, stating that employees must not state their actual professional expenses on their income tax return. If they want to benefit from the exemption, employees will therefore only be able to state the standard rate of professional expenses on their income tax return. If not, the bicycle allowance will be taxable at the progressive rates, together with the employee's other professional income (VAA).