During the Cycling Industry Summit held in Brussels at the end of last year, several proposals were discussed on how EU countries could encourage cycling while supporting the growth of the cycling industry. In a hall full of industry leaders and policymakers, French MEP François Kalfon highlighted the bike and e-bike leasing model, which has proven successful in Germany and other countries. His speech drew on data from a study published by the European Cyclists’ Federation (ECF) in July of last year.
The report emphasises the benefits brought by allowing employees to deduct leasing costs from taxes and social security contributions. In Germany, these tax incentives resulted in a fleet of 2.1 million leased bikes by the end of 2024, with numbers growing at an incredible 30% per year since 2019.
Would you lease a new bike or e-bike if your employer helped you get one? © Profimedia
Boosting cycling interest across Europe
The programme has become extremely popular. By the end of 2024, around 270,000 German companies and public organisations had joined. More than three-quarters of German companies cite bike leasing as a key employee mobility benefit. Costs are reported to be about 40% lower than direct purchase, which allows people to choose higher-quality bikes than they would buy out of pocket. Since 78% of leased bikes in Germany are e-bikes, the report states that tax incentives contribute to acquiring high-quality, comfortable, fast, and sustainable transport. E-bikes, in particular, have a twelve times lower carbon footprint than private cars.
Tax incentives also benefit cycling as an industrial sector, which has faced challenges in recent years. Interest in bike leasing generated €3.1 billion in turnover for providers and supported approximately 489,000 jobs. Besides Germany, similar tax models are applied in Belgium and the Netherlands.
How bike leasing works
Bike leasing is a company benefit, allowing employees to lease a bike or e-bike through their employer. This benefit also applies to managers or business owners who employ themselves in their own company. Lease payments are made monthly from gross salary via salary conversion, reducing taxes and social security contributions. Employers face no upfront costs or risks while gaining higher employee loyalty, improved image, and a healthier workforce.
At the end of the lease, employees can purchase the bike from the leasing company at the residual value. If they decline, the bike enters a refurbishment programme and eventually re-enters the used-bike market. This process extends product lifespan, reduces waste, and creates new jobs.
Watch out for tax audits
Because leasing affects taxes and social security contributions, it’s crucial to follow legal rules regarding eligibility and how companies claim tax relief. Regulations state that all employees are entitled to the benefit, and employers cannot deny access. Tax advisors in countries where company bike leasing exists recommend careful documentation, such as having employees confirm the bike is used for commuting. Incorrect procedures may result in fines or interest charges. Safety equipment like helmets, lights or reflective vests can also be claimed as deductible costs, as they improve commuting safety.
