Reporting a bicycle benefit or an employer-subsidised commuter ticket benefit
A bicycle benefit, often called employer-provided bicycle, is established when the employer provides a bicycle for an employee for private use. The bicycle may be owned by the employer or acquired through a leasing agreement.
An employer-subsidised commuter ticket, often called employer-provided commuter ticket, is a personal public transport ticket provided by the employer to the employee for commuting between the employee's residence and place of work.
Both benefits must be reported to the Incomes Register even if no taxable benefit is formed for the employee.
Find out the value of the fringe benefit
The employer reports to the Incomes Register the monetary value of the fringe benefit, which is typically its annually determined taxable value.
Of the bicycle benefit, EUR 1,200 is tax-exempt income. Of the employer-subsidised commuter ticket benefit, EUR 3,400 is tax-exempt income.
The tax-exempt bicycle benefit reduces the maximum tax-exempted amount of the employer-subsidised commuter ticket benefit. If an employee receives both a bicycle benefit and an employer-subsidised commuter ticket benefit, their total tax-exempt amount can at most be EUR 3,400 annually.
How to report a bicycle benefit
Report bicycle benefits to the Income Register every month with an earnings payment report. You can report the benefit in a separate report or in conjunction with the payment of wages.
You can give the bicycle benefit either as an addition to wages or by deducting it from the amount of wages. See the following instructions for what you should report in these situations:
Reporting a benefit
Report
the tax-exempt share of the bicycle benefit with income type 363 Bicycle benefit, tax-exempt share
the share considered part of wages with income type 364 Bicycle benefit, taxable share.
Withholding tax and reimbursement from employee
Add the amount you withhold for the bicycle benefit to the other amounts withheld reported on the same earnings payment report and report them as a total sum with income type 402 Withholding tax.
If you collect a reimbursement for the bicycle benefit from the employee, report it in full with income type 420 Reimbursement collected for bicycle benefit.
Also deduct the collected reimbursement from the amount considered part of wages. If there is no share considered part of wages or if the share does not cover the entire sum, deduct the reimbursement or the rest of the reimbursement from the tax-exempt share. Report the remaining amount or difference with income type 364 or 363.
Reporting the benefit annually
If the tax-exempt bicycle benefit is not processed in the payroll system at all, you can report the total amount of an employee’s bicycle benefit to the Incomes Register on an earnings payment report once a year.
An employer and an employee can agree that the bicycle benefit is granted by deducting an amount corresponding to the amount of the tax-exempt fringe benefit from the employee’s monetary wages.
In this case, the benefit reduces the employee’s taxable gross wages from which taxes are withheld and health insurance contributions are collected. Earnings-related pension, unemployment insurance, and accident and occupational disease insurance contributions must still be calculated based on the wage amount from which the amount of the fringe benefit has not yet been deducted.
Reporting a benefit
Report the benefit as follows:
Report the tax-exempt share of the bicycle benefit with income type 363 Bicycle benefit, tax-exempt share.
Enter the following ‘Type of insurance information’ information for the income type:
Subject to earnings-related pension insurance contribution: Grounds for insurance contribution: Yes
Subject to unemployment insurance contribution: Grounds for insurance contribution: Yes
Subject to accident and occupational disease insurance contribution: Grounds for insurance contribution: Yes
If the amount of the bicycle benefit exceeds the tax-exempt share, report the exceeding share with income type 364 Bicycle benefit, taxable share.
Withholding tax and reimbursement from employee
Add the amount you withhold for the bicycle benefit to the other amounts withheld reported on the same earnings payment report and report them as a total sum with income type 402 Withholding tax.
If you collect a reimbursement for the bicycle benefit from the employee, report it in full with income type 420 Reimbursement collected for bicycle benefit.
Also deduct the collected reimbursement from the amount considered part of wages. If there is no share considered part of wages or if the share does not cover the entire sum, deduct the reimbursement or the rest of the reimbursement from the tax-exempt share. Report the remaining amount or difference with income type 364 or 363.
How to report an employer-subsidised commuter ticket
Report an employer-subsidised commuter ticket benefit to the Incomes Register every month with an earnings payment report. You can report the benefit in a separate report or in conjunction with the payment of wages.
You can give the benefit either as an addition to wages or by deducting it from the amount of wages. See the following instructions for what you should report in these situations:
Reporting a benefit
Report
the tax-exempt share of the the employer-subsidised commuter ticket benefit with income type 341 Employer-subsidised commuter ticket, tax-exempt share.
the share considered part of wages with income type 342 Employer-subsidised commuter ticket, taxable share.
Withholding tax and reimbursement from employee
Add the amount you withhold for the employer-subsidised commuter ticket benefit to the other amounts withheld reported on the same earnings payment report and report them as a total sum with income type 402 Withholding tax.
If you collect a reimbursement for the benefit from the employee, report it in full with income type 415 Reimbursement for employer-subsidised commuter ticket.
Also deduct the collected reimbursement from the amount considered part of wages. If there is no share considered part of wages or if the share does not cover the entire sum, deduct the reimbursement or the rest of the reimbursement from the tax-exempt share. Report the remaining amount or difference with income type 342 or 341.
Reporting the benefit annually
If the tax-exempt employer-subsidised commuter ticket benefit is not processed in the payroll system at all, you can report the total amount of an employee’s employer-subsidised commuter ticket benefit to the Incomes Register on an earnings payment report once a year.
An employer and an employee can agree that the employer-subsidised commuter ticket benefit is granted by deducting an amount corresponding to the amount of the tax-exempt fringe benefit from the employee’s monetary wages.
In this case, the benefit reduces the employee’s taxable gross wages from which taxes are withheld and health insurance contributions are collected. Earnings-related pension, unemployment insurance, and accident and occupational disease insurance contributions must still be calculated based on the wage amount from which the amount of the fringe benefit has not yet been deducted.
Reporting a benefit
Report the benefit as follows:
Report the tax-exempt share of the benefit with income type 341 Employer-subsidised commuter ticket, tax-exempt share.
Enter the following ‘Type of insurance information’ information for the income type:
Subject to earnings-related pension insurance contribution: Grounds for insurance contribution: Yes
Subject to unemployment insurance contribution: Grounds for insurance contribution: Yes
Subject to accident and occupational disease insurance contribution: Grounds for insurance contribution: Yes
If the amount of the benefit exceeds the tax-exempt share, report the exceeding share with income type 342 Employer-subsidised commuter ticket, taxable share.
Withholding tax and reimbursement from employee
Add the amount you withhold for the employer-subsidised commuter ticket benefit to the other amounts withheld reported on the same earnings payment report and report them as a total sum with income type 402 Withholding tax.
If you collect a reimbursement for the benefit from the employee, report it in full with income type 415 Reimbursement for employer-subsidised commuter ticket.
Also deduct the collected reimbursement from the amount considered part of wages. If there is no share considered part of wages or if the share does not cover the entire sum, deduct the reimbursement or the rest of the reimbursement from the tax-exempt share. Report the remaining amount or difference with income type 342 or 341.
Correcting fringe benefits
If there are errors in the data you have reported, correct them as soon as possible after the error is discovered.
As a rule, the VAT rate applicable to fringe benefits is determined by the time of purchase.
Thus, in principle, the VAT increase will not affect existing fringe benefits, such as car benefits. The value of the car benefit is always based on the new purchase price and VAT rate in force at the time of purchase, whether the car is company-owned or leased.
Similarly, if the bicycle is purchased for the company, the value of the bicycle benefit is determined by the price at the time of purchase and the VAT rate.
If the bicycle is leased to the employee, the change in the VAT rate may affect the value of the bicycle benefit. If the value of the benefit exceeds the annual tax exemption threshold of EUR 1,200 due to an increase in the VAT rate, the part of the benefit exceeding EUR 1,200 will be considered a taxable bicycle benefit.
The general VAT rate will rise from 24% to 25.5% on 1 September 2024.
Example: The value added tax rate increases, and now the value of the benefit exceeds the tax-exemption limit of EUR 1,200
If the value of the benefit has been EUR 100 per month and increases to EUR 101.21 after the value added tax rate increases, report the benefit monthly as follows in future:
EUR 100 with income type 363 Bicycle benefit, tax-exempt share
EUR 1.21 with income type 364 Bicycle benefit, taxable share.
The tax-exempt share of the bicycle benefit is always assessed as an annual amount. If the benefit from the bicycle remains below the EUR 1,200 annual limit even after the change, report the benefit as you have until now.
If the annual tax-exemption limit of EUR 1,200 is exceeded after changing bicycles, the benefit becomes partly subject to tax. However, you do not need to correct the reports you have submitted earlier in the year.
From now on, report the partly taxable benefit to the Incomes Register every month as follows:
Report the tax-exempt share of the benefit with income type 363 Bicycle benefit, tax-exempt share.
Report the share considered part of wages with income type 364 Bicycle benefit, taxable share.
If you have reported the maximum amount of the benefit already earlier for the current year, only report the taxable share of the benefit every month from now on.
Example: The value added tax rate increases, and now the value of the benefit exceeds the tax-exemption limit of EUR 1,200
If the value of the benefit has been EUR 100 per month and increases to EUR 101.21 after the value added tax rate increases, report the benefit monthly as follows in future:
EUR 100 with income type 363 Bicycle benefit, tax-exempt share
EUR 1.21 with income type 364 Bicycle benefit, taxable share.
If an employee gives up their partly taxable bicycle benefit in the middle of the year and the amount of the benefit remains under the annual tax-exemption limit of EUR 1,200, you must correct the reports you have already submitted.
Correct the earlier reports with a replacement report. Remove the amount you reported with income type 364 Bicycle benefit, taxable share from the submitted reports and add a corresponding amount with income type 363 Bicycle benefit, tax-exempt share.
The tax-exempt share of the bicycle benefit is assessed as an annual amount. Therefore, the benefit ending or any other change reducing the total amount of the benefit, such as changing the bicycle to a more affordable one, can lead to a situation where amounts that were considered wages earlier become tax-exempt.
Yes, if the benefit is activated or stopped in the middle of the year.
Example: An employee receives a EUR 150 bicycle benefit in July
An employee receives a EUR 150 bicycle benefit in July, which makes the total value of the benefit received in six months EUR 900. The benefit is fully tax-exempt, because its total value remains under the annual tax-exemption limit of EUR 1,200.
Report the EUR 150 of the benefit on an earnings payment report every month with the income type 363 Bicycle benefit, tax-exempt share. If the benefit is not processed in your payroll system at all, you can report the total amount of the benefit in one go.
Always report the benefit for periods of unpaid absence if the employee can use the bicycle during their absence. The unpaid absence can be because of an alternation leave or a lay-off.
Report the tax-exempt share of the bicycle benefit monthly to the Incomes Register with income type 363 Bicycle benefit, tax-exempt share.
If the benefit is not processed in your payroll system at all, you can report the total amount of the benefit in one go.
Do this if the benefit is given by deducting it from wages
If the bicycle benefit is given by deducting it from the employee’s wages and it is also given during a paid absence, the benefit is considered income subject to earnings-related pension, unemployment insurance, and accident and occupational disease insurance contributions for the duration of the absence as well.
Report bicycle benefits to the Income Register every month as follows:
Report the tax-exempt share of the bicycle benefit with income type 363 Bicycle benefit, tax-exempt share.
Enter the following ‘Type of insurance information’ information for the income type:
Subject to earnings-related pension insurance contribution: Grounds for insurance contribution: Yes
Subject to unemployment insurance contribution: Grounds for insurance contribution: Yes
Subject to accident and occupational disease insurance contribution: Grounds for insurance contribution: Yes
If the employer and employee have agreed that the benefit is included in total wages, the employer can reduce the employee’s wages by the amount of the bicycle benefit already before the absence or, alternatively, after the employee returns to work.
The reduced monetary wages are subject to tax and health insurance contributions. Report the amount deducted from the wages with the income types for situations involving a substitute payer (322–324) because regardless of the deduction, the total amount of the income is considered earnings from work subject to earnings-related pension, unemployment insurance, and accident and occupational disease insurance contributions.
