There are a lot of countries around the world that are keen to get rid of their car-centric cities and promote a more distinguished urban core with less pollution and less noise. Therefore, they pay people who cycle to work.
Many countries in Europe love their bikes, and governments all around the European Union have adopted policies to reduce the use of private cars in favor of bicycles and public transit.
Most countries are obviously a little different in their approaches to changing their urban cores, but several have adopted a similar strategy to get people out of their cars and onto bicycles.
For example, in the Netherlands, the government pays 21 cents for every kilometer (.62 miles) traveled from home to work, an amount that will increase to 23 cents in 2024.
This amount is paid by the Central Administration, is tax-free, and can reach more than 1,000 euros (1100 USD) per year. With 20 kilometers (12.42 miles) a day, you would exceed the 1,000 euros per year limit.
Tax deductions for the self-employed
If your company wanted to increase that amount, beyond 21 cents, then they would have to start paying taxes on it. In the case of the self-employed, their reward comes in the form of a tax deduction.
It doesn’t stop there, because the Netherlands’ so-called ‘Bike Plan’ also gives tax benefits for workers who buy a bicycle through their company.
Workers pay directly from their gross salary and obtain a tax benefit of 40 percent. Basically, if a bicycle costs 1,500 euros (1650 USD), a person would save 600 euros (660 USD) on their income taxes. In addition, both bicycle repairs and insurance can be deducted from income taxes.
This method of tax deduction is also applied by the United Kingdom in its ‘Cycles scheme’ program, which includes tax incentives for both the worker and the company when buying or renting bicycles or safety accessories for them.
In the case of the United Kingdom, aid is conditional on its use as long as at least 50 percent of cycling occurs when people are going to and from work. The employee benefit is paid directly to their salary and the savings come with a 40 percent deductible in taxes.
Added to all of this is a 23 cents per kilometer incentive that citizens can earn, along with an incentive program that also includes discounts on clothing and accessories. Also, for the first four years, the bike belongs to the company that rents it to its employees. After this time, the bicycle becomes the property of the worker.
In France they offer similar aid but, in their case, with a maximum of 800 euros (880 USD) per year. An employee can claim the amount and the company can deduct that from their taxes and social contributions. Everyone wins in money and health.
More aggressive, if that’s even possible, is a campaign with which the French government offers up to 4,000 euros (4400 USD) to those who swap out their combustion vehicle (diesel or gasoline) for an electric bicycle.
In Italy, cities like Bari offer 20 cents per kilometer to those who use the bike to go to work, with a maximum of 300 euros (330 USD) per year (25 euros/ 27 USD per month).
More curious is the initiative in Bologna, Italy, where they reward regular use and not distance. City officials do so by offering gifts from the area in exchange for trips. Thus, after eight trips, an employee can get a free beer or ice cream.
Finally, in Luxembourg, they are more pragmatic and offer a direct tax incentive of 300 euros (330 USD) to whoever buys an electric bicycle to go to work. All for the benefit of the planet.