Lease Bike and Tax Addition (Bijtelling): How does it work exactly?
More and more organizations are offering employees the opportunity to use a lease bike. This is not only good for health and the environment but also financially attractive. It is important for both employers and employees to understand how the tax addition (bijtelling) for a lease bike works. Fortunately, it is simple and cost-effective.
What is tax addition (bijtelling) for a lease bike?
Tax addition is a tax applied when an employee uses a company-provided product for private purposes. In the case of a lease bike, this means the employee pays tax on the private use of the bike.
The tax addition is automatically settled through the monthly salary. So, nothing needs to be paid directly to the Tax Authorities.
Tax addition only applies to the price of the bike, not to accessories or other extras
For a lease bike, a fixed tax addition rate of 7% applies, and this is only on the retail price of the bike itself. Extra costs such as accessories, maintenance, service, and insurance are not included in the tax addition.
Example Calculation
Suppose the lease bike has a retail price of €2,500. The tax addition is calculated as follows:
- Annual tax addition: €2,500 × 7% = €175
- Monthly tax addition: €175 / 12 = €14.58
- Net monthly tax (assuming a 37.1% tax bracket):
€14.58 × 37.1% = €5.41 net per month
In other words: for just over five euros a month, an employee can use a high-quality lease bike without limits.