In the Netherlands and Belgium, mileage allowances are given to encourage employees to cycle to work.
Many citizens are unaware of the company’s allowance for cycling in the distance between home and work, which has been valid in the Netherlands since 2020 and will become law in Belgium this year. However, governments in both countries support this practice, which is beneficial for health and reduces costs.
The ‘Bicycle Allowance’ that companies give to their employees per kilometer can be deducted from tax. This is perceived as a very attractive option for companies to reduce costs.
How much is the Bicycle Allowance in the Netherlands?
Cycling is one of the indispensable parts of the Netherlands. Although the restrictions introduced during the Corona period caused this habit not to be fulfilled, there was an increase in the number of people who started cycling with the removal of the pandemic restrictions. Last year, the number of people who went to the office by bicycle in a week increased by more than 2 million.
Cycling to work has positive effects for employers and employees, the environment and society as a whole.
In the Netherlands, 0.21 euro is paid per kilometer for a bicycle used on the home-work route. This amount is expected to increase to 0.22 euro next year.
There are 3 types of regulations that apply to encourage cycling between home and work:
Company bike (rental bike plan): In this application, the staff uses the company bike. The bicycle can also be used for special purposes. For example, shopping or dropping the kids off at school. All costs of the bike, including repair, are owned by the company, but the staff has to pay a small amount of tax per month. This amount is 7% of the recommended retail price of the bike and accessories. Sometimes the employer can pay this payment himself.
Work-related costs plan (WKR): In this case, it can give an employee a tax-free allowance of up to 1.18% of the salary bill. As of 2022, the rate of 1.7% for the first €400,000 of the total fee and 1.18% for the amount over €400,000 applies.
Allowance per kilometer for bicycle: In this application, an employee who goes to work by bicycle is given per kilometer.
For more information about cycling on the Work-Home route, you can visit the Ministry of Infrastructure and Water Management’s kiesdefiets.nl page.
Bicycle allowance becomes law in Belgium from 1 May
According to the decision taken at the National Work Council (NAR) between trade unions and employers’ organizations at the beginning of this year, every employee who regularly cycles to work in the private sector in Belgium is entitled to a bicycle allowance from 1 May.
For now, about 15 percent of those working in the banking or tourism industry, for example, have not yet qualified.
According to the collective agreement reached, a bicycle allowance of 0.24 euro will be given per kilometer. This amount will be recalculated each year. Bicycle allowance will be given for a maximum distance of 40 kilometers per day.
A person who lives 20 kilometers away from work and cycles to the office every weekday will receive an allowance of 200 euros per month over 40 kilometers per day. Bicycle allowance will usually be given in cash along with the previous month’s salary.
The new bicycle allowance regulation only covers sectors not specified in the existing collective bargaining agreement and those who have an employment agreement on the basis of an individual employment contract or employment regulation. The same conditions will continue to be applied in sectors and companies that have already signed a collective agreement on bicycle allowance, even if the amount per kilometer is lower.
An employee who falls on the way to and from work will be treated as having a work accident and physical damages will be covered through the employer’s work accident insurance.
Bicycle allowance is tax deductible by a percentage. The only condition: use a bicycle to commute to work. The work bike can also be used at special times, and this has no effect on taxation.