How much do I save with a company bike?

Savings depend on your salary, tax class, and bike price. Typically you save 15-40% compared to a private purchase. For an e-bike at €3,000 RRP with a €3,500 gross salary in tax class I, effective monthly costs are around €55-70 instead of the full lease rate of approx. €109. Over 36 months, this means savings of several hundred euros compared to the retail price.

What is the benefit-in-kind for company bikes?

Since 2020, the benefit-in-kind for bicycles and e-bikes (pedelecs up to 25 km/h) through salary sacrifice is only 0.25% of the RRP per month. For a €3,000 bike, that's €7.50 monthly that must be taxed additionally. S-pedelecs (over 25 km/h) are treated like company cars with the 1% rule. If the bike is provided on top of salary (no salary sacrifice), the benefit-in-kind for regular bikes and e-bikes is zero.

What happens when the lease ends?

After the lease term (usually 36 months), you have three options: 1) Buy the bike at residual value (typically 18% of RRP, e.g. €540 for a €3,000 bike). 2) Extend the lease at reduced terms. 3) Return the bike. Most users choose to buy, as the residual value is well below the actual market value.

Is a company bike worth it on a low salary?

Yes, you can still save even on a lower salary, though the tax savings are smaller. From around €2,000 gross salary, company bike leasing is usually worthwhile. Note however that salary sacrifice reduces your social-insurance-liable income, which can have a minor long-term impact on pension and sick pay entitlements.

What is the difference between E-Bike and S-Pedelec for company bikes?

E-bikes (pedelecs) assist up to 25 km/h and are classified as bicycles – no license, no mandatory insurance, and only 0.25% benefit-in-kind. S-pedelecs assist up to 45 km/h and are classified as mopeds – requiring a license plate, insurance, and 1% benefit-in-kind (like a company car). From a tax perspective, e-bikes are significantly cheaper.

Can I use the company bike privately?

Yes, private use is explicitly allowed and encouraged. This is one of the major advantages over traditional company car arrangements. You can use the company bike for commuting, shopping, sports, and leisure – without additional costs or restrictions.

Does salary sacrifice affect my pension?

Yes, salary sacrifice reduces your gross income subject to social insurance. This means you pay less into the pension system, which can affect your future pension entitlements. However, with a lease rate of €100 monthly over 36 months, the impact on your eventual pension is minimal (a few euros less per month). The immediate savings far outweigh this in most cases.

What does the company bike cost the employer?

With pure salary sacrifice (no employer subsidy), the company bike costs the employer nothing – they actually save money, as they don't pay social insurance contributions on the converted amount (about 20% of the conversion amount). The employer only has the administrative effort for the framework agreement with the leasing provider. A voluntary employer subsidy is an attractive benefit that is tax-deductible as a business expense.

Can I claim commute allowance despite having a company bike?

Yes! The commute allowance (€0.30 per km for the first 20 km, €0.38 from the 21st km) can be claimed regardless of whether you use a company bike. This applies to all means of transport. So in addition to savings from salary sacrifice, you can deduct the commuter allowance in your tax return.

How does insurance work with a company bike?

Most leasing providers (JobRad, BusinessBike, Lease-a-Bike, etc.) offer all-inclusive packages that include theft insurance, comprehensive coverage, pick-up service, and wear-and-tear repairs. Costs are typically €5-15 per month depending on the bike value and coverage scope. These costs are usually included in the monthly lease rate.

Company Bike Salary Sacrifice: How It Works Step by Step | Company Bike Calculator

What Does Salary Sacrifice Mean for Company Bikes?

Salary sacrifice (Entgeltumwandlung) means that a portion of your gross salary is converted directly into a non-cash benefit — in this case, the lease payment for your company bike. The rate is deducted from your gross pay before taxes and social insurance contributions are calculated. This reduces your deductions and saves you real money.

Step by Step to Your Company Bike

Step 1: Check Your Employer's Framework Agreement

First, your employer must have signed a framework agreement with a leasing provider. The largest providers in Germany are JobRad, BusinessBike, Lease-a-Bike, and Eurorad. If your employer doesn't yet offer a company bike program, suggest it — the effort is minimal and there are numerous advantages for the employer too.

Step 2: Choose Your Bike

You can select your preferred bike from any participating dealer. There are typically no restrictions on type — from city bikes and e-bikes to mountain bikes and cargo bikes, everything is possible. The price serves as the basis for the lease rate.

Step 3: Lease Contract and Supplementary Agreement

The lease contract is concluded between your employer and the leasing provider. You additionally sign a supplementary agreement to your employment contract that regulates the salary sacrifice. The standard term is 36 months.

Step 4: Monthly Payroll

On your payslip, the lease rate appears as a gross salary reduction. Your taxable income decreases accordingly, as does the assessment basis for social insurance. Simultaneously, the benefit-in-kind (0.25% of RRP for e-bikes, 1% for S-pedelecs) is added as a non-cash benefit.

Step 5: Use and Insurance

You can use the bike without restrictions from the moment of handover — for commuting, privately, on vacation. Insurance (theft, comprehensive, wear and tear) is typically part of the lease package and included in the monthly rate.

What Appears on Your Payslip?

Your payslip shows the gross salary minus the lease rate as salary sacrifice. Below that: the reduced gross salary, the benefit-in-kind as an addition, the taxes and social insurance contributions calculated on that basis, and finally your net pay. In total, the net loss is significantly less than the lease rate — that is the advantage of salary sacrifice.

Important Tax Details

Benefit-in-Kind Since 2020

For bicycles and e-bikes (pedelecs up to 25 km/h) leased through salary sacrifice, the benefit-in-kind has been only 0.25% of the RRP per month since 2020 (previously 0.5%). For a EUR 3,000 bike, that is just EUR 7.50 per month. S-pedelecs are subject to the 1% rule like company cars.

Combinable with Commute Allowance

Company bike users can also claim the commute allowance in their tax return. The allowance applies regardless of transport mode: EUR 0.30 per kilometer for the first 20 km, EUR 0.38 from the 21st kilometer (2026).

No Effect on Child Benefit

Salary sacrifice has no impact on eligibility for child benefit (Kindergeld) or parental allowance (Elterngeld). Only the taxable income changes, not the gross income in the employment law sense.

Common Mistakes to Avoid

Make sure the lease rate is proportionate to your salary level. A rule of thumb: the rate should not exceed 5% of your gross salary. Also check that the insurance coverage meets your needs and that the buyout price after the lease is transparently communicated.

Another common mistake: starting salary sacrifice without considering the impact on parental allowance (Elterngeld). If you are planning parental leave in the near future, you should start the salary sacrifice only after the birth, as parental allowance is calculated based on the net salary of the last 12 months before birth.

How High Should the Lease Rate Be?

The ideal lease rate depends on your gross salary. At a salary of EUR 3,500 gross, a sensible rate is approximately EUR 80-150 per month. This corresponds to a bike price of about EUR 2,500-4,500 over 36 months. Those who invest more save more in absolute terms — but the rate should not cause the remaining gross salary to fall below the social insurance contribution ceiling.

Special Cases: Fixed-Term Contracts and Part-Time Work

Employees with fixed-term contracts can also use a company bike, provided the contract runs at least as long as the lease. Part-time workers can also participate — but ensure the minimum wage is not undercut. The rate must be chosen so that the remaining salary meets at least the statutory minimum wage.

Conclusion

Salary sacrifice for a company bike is a straightforward way to save significantly on a bicycle purchase. The process is simple for employees, the tax advantages are clearly defined, and private use is explicitly permitted. Whether e-bike, road bike, or cargo bike — the company bike model works for all bicycle types and price ranges. Use our company bike calculator to determine exactly how much you can save.