Australian employers are being urged to offer electric bikes as a salary sacrifice for their employees.
Cars are already commonly salary-sacrificed, in a system that is attractive to employees and employers alike for the financial benefits it offers both.
The system means an employee gets a reduced taxable income and avoids GST on the purchase and running of the vehicle. The employer benefits from being able to offer an enhanced salary package attractive to employees while the novated lease to provide the vehicle incurs a lesser cost to the business.
Now electric bikes can be offered on the same sort of novated lease as cars through an Australian start-up called E-stralian, which has obtained a ruling from the Australian Taxation Office to allow ebikes to be a salary sacrifice item for riding to work.
E-stralian argues that by offering ebikes to salary sacrifice companies attract and retain quality staff, who are healthier and more productive, taking 1.3 fewer sick days per year.
The leases offered – ranging from one to five years in duration – are much cheaper to offer than a company car: from less than $3 per day.
E-stralian have teamed up with Cargocycles bike shop in Melbourne to offer a leasing option for the Yuba Spicy Curry, an electric cargo bike new to the Australian market, which is especially perfect for commuters with kids.
Cargocycles owner and avid ebike commuter, Gary Cookson says “Being stuck in hideous traffic after dropping kids off at childcare or school and then battling to find a car park drains you before you workday even starts.
“We think it’s time families and commuters seriously reassess their transport issues. Most car trips are 30 kilometres or less! Electric bikes and cargo bikes are an ideal solution to replace cars in urban areas and with a novated leasing option getting rid of your car, or second car is easier and more affordable.”
Employees taking up these leases should know that the full fringe benefit tax advantage is on the expectation that the rider will be using the bike primarily for commuting to work, and that “non-work-related use that is minor, infrequent and irregular”.
The precise conditions are determined by the Australian Taxation Office’s ruling CR2015/80.
Get yourself ready for commuting by bike with the help of Bicycle Network's Ride2Work Program.
You can use the bike for regular recreational riding but will need to account for the usage, which will reduce the fringe benefit tax advantage.
A calculator on the E-stralian website helps to understand the costs and savings.