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Is bike leasing detrimental to my pension?

Are you thinking about leasing a bike, but have a few concerns about the consequences, such as a lower pension? Together with Attentia’s Social Secretariat, we will provide you with a few words of advice regarding this much-debated topic.

Impact of bike leasing on social security

Can you  choose a lease bike via your employer’s flexible remuneration plan?  This is often based on an exchange for your gross salary. If you exchange some of your gross salary for a lease bike, you receive a new, lower gross salary.

Below you can see an example of a white-collar worker who chooses a bike with a catalogue value of € 2,000 and a lease cost of € 81 per month.

pension, Cyclis Bike Lease, bicycle leasing

Over the leasing period (usually 36 months) the gross salary for the employee in this example is € 2,742.16. All calculations will be based on the new gross salary.

Social security on the basis of the new gross salary:

  • occupational disability: sickness, maternity leave, occupational accident, etc.
  • unemployment: temporary and full unemployment
  • statutory pension

Be aware that there is sometimes no impact on social security benefits if your salary stays above the applicable ceiling for the benefit.

For unemployment, the ceiling is set at a maximum of € 2,754.76 gross per month (amount valid since March 2020).

For the statutory pension, the current ceiling is € 58,446.94 per year (amount in 2019). Will your new gross salary for the accumulation of your pension still be above this? If so, there will be no impact on your pension.

Impact of bike leasing on other payments

Your lower gross salary also forms the basis for payments made by your employer or a Social Fund. This includes:

  • 13th month: in the above example, this becomes €   instead of € 2,800.
  • Holiday money
  • Indexations and increases in the gross salary
  • All calculations that are based on a percentage of the gross salary, such as shift premiums, wage-related allowances, bonuses, etc.

Is bike leasing advantageous?

Bear the above consequences in mind if you wish to lease a bike.
However, these do not equal the net benefits that you gain as an employee. Choosing a lease bike via a flexible remuneration plan is more advantageous than buying privately. Moreover, you enjoy all the corresponding services and have no further concerns.

To estimate the net benefit for the above scenario, take account of the following details:

  • Net contribution per month = € 20.76
  • For a white-collar worker, this will have an impact of 13.92 (12 x wage + holiday allowance + end of year premium): € 20.76 * 13.92 = € 288.98 per year
  • For the full lease period, this will equate to a net cost of € 866.94  (€ 288.98 * 3 years)
  • If I buy the bike myself, with my own net income, I would pay € 2,000
  • Now, I have paid (net) just € 866.94.

Labourers often work at an hourly rate rather than a monthly salary. When choosing a lease bike, the labourer’s gross hourly rate is reduced on the basis of the choice. In the above example, for a labourer working a 38-hour week, this would translate into a reduction in the gross wage from € 17.02 (this equates to an average gross per month of € 2,800) to € 16.65 gross per hour. 

Leasing a bike according to the principle of a deduction from the gross wage has a lesser impact on social benefits and your pension as these are calculated according to your gross wage. However, this ‘disadvantage’ does not equal the huge net advantage you have compared to a private purchase. 

Further questions?

For any questions about   wage/salary related issues, please talk to our contact at Attentia:

Katrien Nijs 

Senior Legal Consultant

legalpartners@attentia.be

Would you like to benefit from a new bike with the corresponding accessories and services, such as bicycle insurance, VAB breakdown assistance and a flexible maintenance package?

Contact us to find out more (with no obligation): info@cyclis.be or 011 730 115

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      Hendrik Van Veldekesingel 39A box 1.02
      3500 Hasselt
      BELGIUM

        Stay informed, subscribe to our newsletter!



        Jobs.

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        Copyright 2020 Cyclis