Calculating the actual financial impact of leasing a company bike through gross salary exchange isn't always straightforward. While many advisors simplify the process, Joule aims to provide employees with real insights so they can make informed decisions about their dream lease bike. Below, we outline the key legal sources and factors involved.
The cost of bike leasing
Important: The cost of bike leasing depends on personal and company-specific factors, such as the number of dependent children and marital status. As a result, the final cost may differ from initial calculations. For an accurate estimate, we recommend consulting your payroll provider.
What legal rules affect your salary and employment conditions?
Your salary is influenced by regulations at various levels. National laws, such as Royal Decrees, determine taxation rules and establish differences between the public and private sectors. For example, they set income tax brackets.
Additionally, the National Social Security Office and tax authorities may issue further guidelines.
Sectoral agreements (collective labor agreements or CLA) also play a role. These agreements apply only within the relevant joint committee and regulate aspects like minimum wages, year-end bonuses, travel costs, and specific working conditions per sector. The largest joint committee in Belgium is PC200 for white-collar employees.
In the Joule calculator, you can select different joint committees. If yours isn’t listed, you can simulate calculations using PC200 (white-collar employees) or PC100 (blue-collar workers) for an estimated outcome. For a precise calculation, consult your employer or payroll provider.
Finally, your employer has a significant influence on your salary and employment conditions, including wage levels, bike allowances, and remote work allowances.
When leasing a bike through your salary package, all these factors impact your net income.
What are the basic principles of a company bike?
In Belgium, a company bike provided by your employer is fully exempt from social security contributions and income tax, provided it is regularly used for commuting. However, this exemption applies only if you do not opt to deduct and prove your actual work-related expenses in your tax return.
A company bike can be financed in different ways. If permitted within your sector or company (for instance, if you’re not tied to a fixed wage scale), you can opt to exchange part of your salary to finance the bike.
If you finance the bike via your gross salary, your employer cannot derive financial benefits from the arrangement. This means the total annual labor cost for your employer cannot decrease due to the introduction of a company bike. These labor costs include all expenses incurred by your employer for your employment, such as gross salary, employer social security contributions, holiday pay, and workplace accident insurance.
In practice, this means that all fiscal and social benefits received by your employer through bike leasing must be fully passed on to you.
What factors influence the Joule calculator?
The Joule calculator is a powerful tool for calculating bike leasing costs. Because bike leasing is complex, the calculator considers the following factors. Simply enter your details, and you're all set!
Employer social security contributions
You don’t see it on your payslip, but in addition to your gross salary, your employer pays employer social security contributions. This typically amounts to about 25% of your gross salary, including your year-end bonus.
When you exchange part of your gross salary to finance your bike, your employer generally pays lower employer social security contributions. This financial benefit is fully returned to you using the following formula:
(12 x monthly lease price) / (13 x 1 + employer social security percentage + 0.92)
As a result, the amount deducted from your gross salary is lower than the monthly lease price your employer pays to the leasing partner.
Employee social security contributions and special social security contribution
As an employee, you pay social security contributions, which are visible on your payslip. This typically amounts to 13.07% of your gross salary. As mentioned earlier, you do not pay social security contributions on the portion of your salary exchanged for a bike, offering you an additional financial advantage.
After deducting social security contributions, you get your taxable salary.
Additionally, employees usually pay a special social security contribution. This amount can change due to a gross salary exchange and is therefore included in the Joule cost calculator. The special contribution is expected to be abolished soon.
Taxable salary and withholding tax
After deducting social security contributions, your taxable salary remains. Withholding tax is then deducted, serving as a prepayment of your income tax, which is later adjusted.
The amount of withholding tax depends on factors such as your marital status and number of dependent children and is calculated progressively—the higher your income, the higher the tax percentage. Because no withholding tax is paid on the bike portion of your salary, this creates another financial benefit.
Additionally, a gross salary exchange may place you in a lower tax bracket, allowing you to take home more net income than before. This impact is also factored into the Joule cost calculator.
Social benefits, year-end bonus, and vacation pay
Since your gross salary decreases monthly with a gross salary exchange, you also accumulate slightly fewer social security rights. The exact impact on your pension is difficult to predict, as it depends on various factors determined only upon retirement, such as the total number of working years.
What is immediately affected is your year-end bonus (if applicable) and vacation pay. These are calculated based on your gross salary, so any reduction could have an effect here as well. However, it’s possible that the lower gross salary places you in a lower tax bracket, allowing you to take home more net income from your year-end bonus and vacation pay than before. This impact is included in the Joule cost calculator.
Accident insurance, group insurance, and other costs
With a gross salary exchange, your employer may also save costs on aspects such as accident insurance and group insurance. This financial benefit should, in principle, be passed on to the employee.
However, this aspect is not included in the Joule cost calculator, as employees usually do not have direct insight into it.
Calculate your bike leasing costs!
Our calculator considers (almost) all the above factors so you can get a clear idea of expected costs.
Calculate your bike leasing costs here!
For an exact calculation, we recommend consulting your payroll provider or HR department!
Not sure if bike leasing is right for you? Read this blog post: 'Why leasing a bike is good for your wallet'.
