Several people ride their bikes to work in Valencia Mònica Torres this Thursday
Riding a bike to work every morning is good for your health, for the city (less congestion), for the environment (reduced emissions and pollution) and even for the state (which saves on healthcare costs). For this reason, although the most common practice is to subsidize public transport or even give state aid for car fuel, several European countries have initiatives underway to pay workers who travel by bike: in the Netherlands they have they are increasing the state subsidy this year per kilometer on a velocipede from 19 to 21 cents (the final amount can exceed 1,000 euros per year), while in France the amount can reach up to 800 euros per year. In Spain, the government’s cycling strategy proposes changing tax rules to allow companies to consider cycling as earned income – something that company cars can do – but finance and transport ministries warn that this is not the case currently the case is no reform to encourage them.
The Dutch government subsidizes 21 euro cents for every kilometer traveled by bike between home and work, but this also applies to public transport and cars. This offsets the cost of gas and public transport, which have been frozen at 19 cents since 2006 and have just risen this year; In 2024 it will rise to 23 cents. This amount is paid by the state through company payslips and is tax-free. If a company decides to pay more than 21 cents, it has to pay taxes on it.
What does it mean translated? Ana Castán is a 40-year-old Spanish woman who has lived in Amsterdam for eight years. “In the company app, you have to enter how many kilometers you drive per week. You don’t have to provide any evidence, they trust your word. And the company pays you the amount at the end of the month along with your paycheck, even though it’s money provided by the state,” he points out. “My husband, also from Spain, cycles about 14 kilometers a day, which is about 3,500 kilometers a year. So more than 700 euros a year”. At 20 kilometers per day, it would be around 1,050 euros per year. For the self-employed, it works as a tax deduction: “I dedicate myself to bike tours through the city and in my case deduct it from the income statement: in 2020 it was about 1,500 euros,” Castán continues. In his opinion, this payment isn’t strictly necessary to get people kicking, but it helps. “It also influences that there is a lot of bicycle infrastructure to get around safely and that public transport is very expensive.”
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France is also committed to getting government support for workers who commute to work by bike and other eco-friendly vehicles, such as electric or car-sharing vehicles. Companies can voluntarily use the so-called “permanent mobility pass” (FMD, in French) and pay up to 800 euros per year to each person using these means of transport. The companies then deduct these amounts from their taxes and social security contributions. In the public sector, the amount may not exceed 300 euros per year. In addition, the country is offering subsidies to swap old cars for electric bikes, a measure not on the table in Spain, according to the Green Transition and Transport Ministries.
A man commutes to work by bicycle in Amsterdam Romy Arroyo Fernandez (NurPhoto via Getty)
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Back in the Netherlands, the executive is running another initiative called the Bike Plan to buy it over companies at a lower price and with tax benefits. It works as follows: The employee buys a new bicycle, regardless of the type, which he can also use privately. You must pay it to your employer through gross salary, with a tax benefit of up to 40%. For example, if you decide on an electric model worth 1,000 euros, you save 400 euros in income tax at the end of the year. This means that the bike actually cost 600 euros. Insurance and repairs, on the other hand, are tax deductible.
The companies that join the bike plan choose how to reimburse the price of the bike and can deduct the cost of the purchase from their taxes on their income. Workers who comply with these types of agreements, meanwhile, will have to scrap the 21 cent per kilometer bonus for commuting. According to the Dutch executive, 27% of all journeys are made by bicycle and more than half of all journeys by car fall short of an average distance of 7.5 kilometres. E-bike models, on the other hand, are preferred for these trips.
A similar measure to that introduced in the UK in 2019, the Cycle to Work Scheme includes a range of incentives and tax breaks for businesses and workers. Both employers and employees receive tax deductions and reductions on their social security contribution for the purchase or rental of bicycles and safety accessories such as helmets or locks.
However, it is not a direct subsidy: the rent is part of the employee’s gross monthly salary. A prerequisite for the subsidy is that the bicycle is used for at least 50% for commuting to and from work. Javier Panizo, 44, has been working in London for 10 years: “You pay the cost of the bike from your gross salary, which saves you up to 40% in taxes. The bike belongs to the company for the first four years, after four years it is yours. I bought two bikes to ride to work. I ride about 10km a day, although I also work remotely.” To date, nearly 40,000 companies have enrolled in the program, which has enabled 1.6 million people to ride their bikes every workday. In countries like Belgium, Denmark or Germany there are also programs that encourage people to cycle to work.
A change that will not come
In Spain, the government cycling strategy proposes changing tax rules to include cycling to work as income in kind, i.e. part of salary, which is currently only possible by car (if the company provides a rental vehicle). the employee as part of his salary). However, a spokesman for the Treasury Department says that no regulatory project on the subject is currently underway, nor is it on the table under the Sustainable Mobility Bill promoted by the Department of Transport.
This rule includes the obligation for large companies (with more than 500 employees or 250 per shift) to create sustainable mobility plans to work. “These plans must include the promotion of active mobility, collective transport, zero-emission mobility …” they emphasize from Transport. It doesn’t appear that this will result in payment for pedaling. Laura Vergara, spokeswoman for the Con Bici coordinator, points out that the implementation of this aid in companies “requires a state public policy that is currently not in sight”.
A woman cycles on a cycle path in Valencia last Thursday. Monica Torres
While it matters when it matters, “the bike companies are proposing that flexible compensation can be applied to bikes, as is already the case for cars. So far there is a 40% discount on car purchases as flexible compensation, but for the time being they are refusing to activate it for bikes as well,” summarizes Vergara. Transport defends that “the efficient thing is to encourage the use of the bicycle”, which is why they recall that they allocated 224 million euros from European Next Generation funds to subsidize town halls to build bicycle infrastructure and public bicycle systems create, and another 266 for communities to build and improve bike lanes.
The initiative of Liberty Seguros, a pioneer in Spain in paying employees to cycle to work, surprises with this panorama. “We pay our employees 0.37 cents for the bike ride. We started in 2016 and since then we have welcomed 109 employees [casi el 10% de sus 1.200 trabajadores], to whom we paid 85,236 euros for around 219,000 kilometers between this year and 2020, ”emphasizes a spokeswoman. However, as of March of this year, they have opted for 100% teleworking, making the still-ongoing concept not as popular as it was in previous years.
With information from Marc Bassets (Paris) and Raphael de Miguel (London).
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