Impact of bicycle leasing on social benefits

Can you choose a leased bike through your employer through a flexible compensation plan? If so, this is often on a gross salary trade-in basis. When you exchange a piece of your gross salary for a leased bike, a new, lower gross salary is created.

Below is an example of a clerk choosing a bicycle with a list value of €2,000 and a lease cost of €81 per month.

During the lease period (usually 36 months), the employee’s gross salary in the example is €2,742.16. Thus, all calculations will be based on the new gross salary.

Social benefits based on new gross wages:

• disability: illness, maternity leave, industrial accidents, etc.
• unemployment: temporary and full unemployment
• statutory pension

Keep in mind that sometimes there will be no effect on Social Security benefits if your wages are still above the applicable benefit ceiling amount after the exchange.

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

For the statutory pension, the current ceiling amount stands at €58,446.94 (2019 amount) per year. Is your new gross annual salary for pension accrual still above that? Then there is no more impact on your retirement.

Impact of bicycle leasing on other payments

Your lower gross pay is also the basis for payments made by your employer or a Social Fund. We consider, among others:

• 13th month: it therefore becomes €2,742.16 gross in the above example instead of €2,800.
• Vacation money
• Indexations and increases on gross pay
• All calculations based on a percentage of gross pay, such as shift premiums, overtime bonuses, possibly bonuses, …

So is bike leasing advantageous?

Keep the above implications in mind if you want to lease a bike.
But these outweigh the net benefit to you as an employee. Choosing a leased bike through a flexible compensation plan is more economical than a private purchase. Moreover, you will then enjoy all the associated services and be completely unburdened.

To estimate the net benefit to you in the above benefit, consider the following reasoning:

• Net delivery per month = €20.76
• For a white-collar worker, this is generally going to affect 13.92x (12x salary + vacation pay + end-of-year bonus): €20.76 * 13.92 = €288.98 per year
• So for the entire lease term, this will cost me a net € 866.94 (€ 288.98 * 3 years)
• If I purchased the bike myself with my own net funds, I would have paid €2,000
• Now I paid net only € 866.94

For workers, hourly wages often apply instead of monthly wages. If a leased bicycle is chosen, the worker’s gross hourly wage will be reduced according to the choice made. For example, in the above example, for a worker in a 38-hour week, this would translate to a reduction in gross pay from €17.02 (this equates to an average gross per month of €2,800) to €16.65 gross per hour.

So leasing a bicycle under the principle of gross salary trade-in has a small impact on your Social Security benefits and, to a lesser extent, your pension, because these things are calculated based on your gross salary. But this “disadvantage” outweighs the large net benefit you have over a private purchase.

Any questions?

For further questions regarding payroll matters, please contact our contact person at Attentia:

Katrien Nijs

Senior Legal Consultant

legalpartners@attentia.be

Would you like to enjoy a new bike with accompanying accessories and services such as bike insurance, VAB breakdown assistance and a flexible maintenance package?

Then contact us here with no obligation: info@cyclis.be or 011/730 115