How does the tax benefit of bicycle leasing work exactly?

With bicycle leasing, you as an employee rent a bicycle via your employer for a period of three or four years.

You pay the rent of your bicycle monthly with a part of your gross salary.

When you would have that part of gross salary paid out, then a number of taxes would be deducted from it. That leaves you with a lot less net.

Think of NSSO, taxes and employer contributions, etc.

You do not pay these taxes if you use that piece of gross salary to pay for your bicycle lease.

That means that this amount of your gross salary can go entirely to your bicycle. Whereas otherwise you would just give it to the state.

The net salary you receive is now recalculated on the reduced gross salary. So you are left with a little less net income. But that does not outweigh the cycling benefit you do.

Have you reached the end of your ride? After the lease period, you pay a small amount (16% or 20% of the list price, more details can be found in the Cycling policy) to take over your bicycle.