Denmark: what it costs and how it is taxed

This article applies to Denmark.

What you pay per bike

We invoice you for the full amount, whatever you decide to contribute.

Fund it yourself rather than through salary exchange

Denmark works differently from most countries we operate in. There's no dedicated tax scheme for company bikes, and that changes which approach makes sense.

Funding it yourself works well. You pay the subscription, your employee is taxed on the value of the benefit, and they get a good bike with everything maintained for considerably less than it would cost them privately.

Why a bruttolønsordning doesn't help here

Your employee gives up gross salary and saves tax on it, but is then taxed on the value of the bike, which is assumed to be the same amount. There's no net gain.

You don't gain either. Danish social security contributions are a fixed amount per employee per year rather than a percentage of salary, so lowering gross pay doesn't lower what you contribute. In other countries that saving is what funds the employer's share of a bike scheme. Here it isn't there.

It's a legitimate route and plenty of providers offer it, but the tax saving is smaller than people expect. If your aim is to give your team a genuine benefit, funding it directly is the route that achieves it.

How your employees are taxed

A bike your employee can use privately counts as a taxable personalegode. The taxable value is the market price of renting an equivalent bike for the same period, which is the subscription price.

You report the value through payroll in the normal way and it's settled automatically. Your employee doesn't have to declare anything separately.

A bike used exclusively for work travel, such as visiting clients, can be provided tax-free. In practice that's hard to rely on: as soon as someone rides it between home and work, the tax administration assumes private use as well.

The bagatelgrænse usually doesn't apply. Skatterådet has ruled that a general wish to encourage cycling to work isn't enough to make a bike work-related, so the threshold for work-related benefits doesn't cover it. The subscription value also exceeds the threshold for minor private benefits.

Check the commuter deduction first

Employees travelling more than 12km each way can normally claim a deduction for the distance beyond 12km. That entitlement ends when you pay for their commute, and a bike counts.

For someone with a long commute, losing the deduction can outweigh the value of the bike. Worth checking before you offer it to that group.

For shorter commutes, where no deduction applies anyway, there's nothing to lose.

What it costs your organisation

The subscription is a deductible business expense.

Moms is deductible in proportion to genuine business use, such as employees cycling to customers or between sites. Where bikes are used for commuting and privately, the deduction is limited accordingly. Worth going through with your accountant, since it depends on how your team actually uses them.

If you do run a partial deduction from salary, note that the monthly fee is deducted from your employee's salary without moms.

What you get for it

Denmark hasn't built tax incentives around cycling, so the case for a bike scheme here rests on what it does rather than what it saves.

A subscription gets your team on good bikes with everything maintained, at a predictable monthly cost, with no fleet to manage and no commitment. If someone leaves, you cancel with 30 days' notice or their subscription moves into their own name. Nothing to settle, nothing to buy out, no residual value to argue about.

For a lot of Danish employers that flexibility is worth more than a tax scheme would be.

What happens at the end?

Nothing to settle. The subscription is monthly, the bike stays ours, and there's no buyout.