Bike lease: how it works and what the benefits are

You’ve probably heard or read something about it recently: the lease bike, or bike lease. The government wants working people in the Netherlands to cycle more, and is therefore introducing new legislation from 01-01-2020.
This is the bike lease scheme for people in employment, designed to be clear and straightforward. But what exactly does this scheme involve, how does it work, why would you choose a bike lease and where do you get such a bike? Questions many people have. In this article you can calmly go through all the information so you can decide whether you want to make use of the bike lease scheme. 

At the moment the existing rules are still very complicated. For example, if you have a lease bike now, you have to track your private kilometres yourself. On the other hand, you’re allowed to deduct the costs of maintenance and/or repairs. Because of this complexity and all the paperwork, the bike lease is still not very well known or popular. The new, simplified scheme is meant to significantly increase the number of users.

How does the bike lease scheme work?

Just like with a lease car, you pay a fixed additional taxable benefit for private use of a lease bike. This will be 7 percent of the bike’s original list price. Given the higher-end bikes – think of electric bikes or speed pedelecs around EUR 3600 – leasing is an interesting option. For example, an E-bike costing EUR 2500,- will soon come down to around EUR 5,- per month. For a speed pedelec this will be around EUR 10,-, depending on the purchase price and salary bracket. The lease costs are on top of this, but these are paid by the employer, and the usual travel allowance lapses.

What are the benefits of a bike lease?

Cycling is, of course, good for your fitness and health. On top of that, using a bike helps the environment, as you’re expected to use the car less. Another advantage of a bike lease is that you don’t have to pay a large one-off purchase price. Just as with a car, your employer pays a fixed monthly lease fee, and you only pay a small additional taxable benefit of just a few euros per month for using the lease bike. This allows you to pick your dream bike, as the range includes all the well-known brands and bike types. All maintenance and insurance are also included in the monthly lease fee. And if you’d like to keep riding the bike after the lease contract ends, you’ll usually have the option to buy it at an attractive price. That’s a nice bonus, since you already know the bike’s condition and maintenance history.

Bike lease versus Fietsplan

Bike lease
A lease bike is actually comparable to a lease car: the bike is provided by an employer to an employee. This means that the legal ownership remains with the employer. So when an employee leaves the company, they may not keep the bike. Payment for the purchase, insurance and maintenance of the bike is the employer’s responsibility.
So there are costs involved for the employer. For an electric bike these are roughly EUR 100,- per month. The employee’s costs are relatively low and consist only of the additional taxable benefit of less than EUR 10,- per month. This 7% benefit is for private use of the bike outside commuting. The 7% is calculated on the original list price and added to the employee’s taxable income. All this is still subject to the final plan drawn up by the government and presented on Budget Day 2019.

Fietsplan
Unlike a bike lease, the Fietsplan doesn’t involve any costs for the employer. Ownership lies with the employee and the tax benefit is covered by the tax authorities.
The benefit arises because the full purchase price of the bike is deducted from the employee’s gross salary. An employer even saves some money, because they don’t have to pay social security contributions on the part of the salary that is not paid out. Buying a bike via Fietsplan can also be settled with overtime, vacation days, etc.

Which option is more attractive for whom?
Fietsplan is more attractive for employers, simply because it doesn’t involve any costs, whereas a bike lease does. For employees, a bike lease appears to be more advantageous. Even though the bike is not your property, the benefit of having no purchase costs and no bills for maintenance or repairs is significant. The relatively low monthly amount makes it a construction most employees won’t want to miss. The only drawback is that the bike is not yours during the term of the contract, usually 36 months. After that, you can buy it for a reasonable price and make it your private property.

Where can you order a lease bike?

Buying a bike is harder than ever: so many brands, so many components, so many providers. How do you choose the perfect bike? And who makes sure you can keep on riding comfortably when something goes wrong?  Here we highlight Fietsenwinkel.nl, one of the largest online bike shops in the Netherlands, with very positive reviews and experiences. Another reason is that they are a frontrunner in bike leasing. Their mission is: "Getting everyone in the Netherlands on a bike. Together towards a fit and healthy world!"
Fietswinkel.nl has recently entered into an exclusive partnership with Leaseplan. International Bike Group, the parent company of, among others, fietsenwinkel.nl, has announced a collaboration with LeasePlan Nederland. They will supply electric bikes to customers of the largest (car) leasing company in the Netherlands. IBG will take care of the complete service operation and the online portal, from delivery and insurance to maintenance and roadside assistance. You can read more about this on Fietswinkel.nl.