Company bikes – what does the deployment of the new employee benefit involve?
As of the beginning of 2021, Finnish employers have had the possibility to provide their employees with company bikes. Many employers wonder about the practical matters related to the deployment of the new employee benefit.
Who supplies company bikes?
The most convenient option is that the company leases the company bikes for a specific period. In practice, this means that the employer enters into an agreement with a company providing company bikes under a leasing agreement, as is the case with company cars.
When concluding the agreement, you should compare the various leasing services in order to ensure that you get the service you need.
It might, for example, be a good idea to offer company bikes and company cars as alternative options. A company bike is also an eco-friendly option for employees to select at their discretion.
Which bike model and how much can it cost?
Companies have various policies that determine whether there is one bike model available to all or if there is a selection of bikes to choose from or whether employees can freely choose the model.
Company bikes have no fixed taxable value. Instead, the taxable value is determined on the basis of the total cost consisting of the bike’s price and any accessories.
One good policy might be to determine the recommended price or model, which then guides employees when they are selecting their bike.
Since the introduction of the benefit, the most popular bike models have been electric bikes, the price range of which is large. Prices start from approximately EUR 1,500.
The employer may deduct the expenses in its taxation.
Agreements related to company bikes
Company bikes are usually obtained for a pre-determined period, such as for 24 or 36 months. Under most leasing agreements, the employee has the possibility to redeem the bike or return it at the end of the period.
When entering into agreements, matters related to employee turnover should be considered. What to do if an employee leaves the company during the leasing period and what are the possibilities provided by the leasing agreement?
Insurance matters related to company bikes should also be discussed already when concluding agreements in order to ensure that they meet your company’s needs.
How much extra work does the company bike benefit cause to HR and payroll?
This depends entirely on the company, its resources and the expertise of personnel.
A new employee benefit does nevertheless require that attention is paid to details in order to ensure that any tax benefits are used and the benefit is processed appropriately.
In addition, the use of the benefit requires administration and monitoring.
If you have outsourced the competitive bidding processes and administration related to employee benefits to us, we take care of any practical matters on your behalf and provide instructions for your financial department and HR personnel.