Even when converting salary: company bicycles become more tax-attractive
Berlin, March 25, 2019 - There have been extensive tax breaks for company bikes since the beginning of the year: If the boss makes the bike available to his employee in addition to his wages, the employee no longer has to pay tax benefits for private trips. Now employees who receive their company bike as part of a salary conversion also benefit. How to do this, explains the consumer guide Finanztip.
Service bike taxation from 2019: When does which rule apply? (Infographic: JobRad)
Experts estimate that there are currently more than 200,000 company bikes in use in Germany. "In most cases, the employer leases the bike and the employee takes part in the form of a salary conversion," explains Udo Reuß, tax expert at Finanztip. If the bike is made available for the first time in the period from January 1, 2019 to the end of 2021, a tax benefit also applies to a deferred compensation: Employees then only have to tax half the gross list price of the bike as a monetary benefit. This allows a current decree of the highest financial authorities of the federal states from March 13, 2019.
Assessment basis halved
"With the leasing model, employees generally agree a cash wage conversion with their boss," says Reuss. "Instead of having part of their salary paid out, they get a service bike that they can also use privately." In most cases, the employer deducts the leasing rate and the insurance premium from the gross monthly wages, often less a subsidy. In principle, one percent of the list price is then added as a monetary benefit for private use. With the current decree, the assessment basis is halved. "In practice, this only leads to 0.5 percent taxation." Overall, the basis for calculating wage tax and social security is reduced, and employees pay less wage tax and social security contributions. And the boss also benefits: "Because of the lower assessment base, employers pay a little less for pension, health, nursing and unemployment insurance."
Further information including calculation example https://www.finanztip.de/dienstfahrrad/
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