The maximum tax-exempt bicycle allowance has been increased from €0.27 to €0.35 per kilometer since January 1, 2024. A substantial increase, but one that doesn't apply to everyone. A well-intentioned measure raises many questions in practice and reinforces the call for uniformity. Let's provide some clarification.
What is a bicycle allowance?
This is a net allowance per bicycle kilometer for commuting to and from work, granted to the employee who regularly travels between their residence and their workplace by bike.
You can find a previous article on the bicycle allowance here.
If, like most Belgian employees, you are entitled to a bicycle allowance based on a rule within your sector (joint committee) or your company – fantastic!
Those sector or company rules still apply in full. The sector or your company is now free to increase the exempted allowance to €0.35 per actual bike-commuted kilometer. However, this is not a right of the employee unless it is specified that the maximum exempted amount is granted. It is expected that most employers will effectively increase the bicycle allowance where possible.
If you don't qualify for a bicycle allowance based on a rule within your sector or your company – no worries!
You are still entitled to a bicycle allowance of €0.27 per kilometer based on collective labor agreement (CLA) 164 bis, which came into effect on May 1, 2023. This amount is not increased, although a more limited indexation is expected.
In both cases, since January 1, 2024, only employees who, in their tax return for the taxable period 2023, opt for the lump-sum cost deduction are eligible. The same applies, incidentally, to the company (lease) bike for commuting.
Maximum €3500 per year
Furthermore, since the last adjustment at the end of January 2024, a maximum of €3,500 per year applies in all cases, alongside any other ceilings. Above that threshold, the bicycle allowance will indeed be taxed. According to Minister Van Peteghem, 99.6% of employees will not reach that threshold, which corresponds to 7,142 kilometers per year, a trip from Brussels to New Delhi, so to speak. And yet, at Joule, we do have two such cycling enthusiasts among our ranks!
Voluntary Bicycle Allowance
Finally, it is also interesting for the employer to voluntarily increase the bicycle allowance. There is a temporary fiscal compensation in the form of a tax credit to mitigate the financial consequences of the introduction of the general bicycle allowance. This is a temporary measure for bicycle allowances paid for commuting made between January 1, 2024, and December 31, 2026, and awarded no later than December 31, 2027. The amount is equal to the increase in the bicycle kilometer allowance multiplied by the number of kilometers for which the allowance is granted within the aforementioned period, with a maximum of 20 kilometers per one-way trip. The tax credit must be claimed in the tax return.
This makes the choice for bicycle leasing more attractive in sectors that do not qualify for gross salary exchange.
Want to know more about the financial benefits of bicycle leasing? Our experts are happy to help.
