It’s been going on since 2023 and it has to be one of the best ideas of all time.

Belgium has one of the most effective cycle-to-work incentive schemes in the world, known as the fietsvergoeding (bicycle allowance). It pays employees for every kilometre they ride to and from work, turning daily commuting into a pretty decent income boost.

Under the current system, workers can receive up to €0.35 per kilometre, tax-free. That means someone riding 10km each way earns about €7 per working day, which can add up to more than €1,500 a year without paying any income tax. The payment is made by employers, but it is fully exempt from taxes and social charges, so companies are encouraged to offer it as part of salary packages.

Can you ride more than that? Yep:

• In addition to the per-kilometre rate, there’s a yearly cap on the total amount that can be received tax-free. For the 2025 income year, this annual ceiling is €3,610 per employee per year.
• If a cyclist earns more than that threshold in a year, only the amount up to the cap remains tax-free; any excess is treated as taxable income.

So while you can keep accumulating kilometres, the tax-free benefit is limited to about €3,610 annually at current indexed rates, and anything above that is subject to tax and social security

The scheme applies to almost every type of bike, including regular bicycles, e-bikes, speed pedelecs, cargo bikes and folding bikes. It doesn’t matter whether the bike is owned by the employee or provided by the company. Workers only receive the allowance for the days they actually cycle, making it flexible and fair.

Importantly, the bicycle allowance can also be combined with train passes, company cars or bike-leasing schemes. By making cycling financially attractive, Belgium has successfully turned commuting into a healthier, cleaner and cheaper option for both workers and employers.

One Reddit user from Belgium had this to say regarding the scheme:

‘My commute is 17km one way, half an hour with a speedpedelec. Did 147 days by bike last year which comes to a little over 1300€ net. From the top of my head i know at least 2 colleagues who have a comparable or higher amount. I suspect this is common at all employers who offer a bike lease program.’

Another, 666Narsil said: ‘My commute is around 100km. No matter the weather. Couldn’t live without this exercise. 11.000km total in 2024. Around 2.700€ earned as our company doesn’t give 35c (yet). On a lease bike. Regular cleaning and replacements are required. It’s best to become (half) a bike technician if you want to do this.

‘It’s one of the few ways to earn (nearly) tax-free in Belgium. Highly recommended. But you need steel nerves sometimes in traffic. I hope the bike survives 3 years of lease!’

What’s the benefit for the government and wider society?

The Belgian government gains several clear gains from the fietsvergoeding, beyond just making workers happy:

1. Lower healthcare costs – More people cycling means better cardiovascular health, fewer obesity-related illnesses, and fewer sick days, which reduces strain on the national health system.
2. Reduced traffic congestion – Fewer cars on the road during peak hours means less congestion, lower road maintenance costs, and fewer accidents.
3. Environmental benefits – Every kilometre cycled instead of driven reduces CO₂ emissions and air pollution, helping Belgium meet climate and air-quality targets.
4. Tax efficiency – The allowance is tax-exempt for the worker but still runs through the formal payroll system, encouraging legal employment and reporting while promoting sustainable commuting.
5. Boost to local economy – People spend money on bikes, accessories, and maintenance, supporting small and medium businesses in the cycling sector.
6. Cultural and social shift – Encouraging cycling normalizes active transport, which can influence urban planning, public transport integration, and long-term sustainability policies.

In short, the government pays a modest allowance per kilometre but benefits from healthier citizens, less congestion, lower pollution, and a more sustainable transport system, often saving far more than it spends.

Can people cheat though? Well, yes and no:

The scheme is built on trust, but with employer and tax controls behind it.

In Belgium the fietsvergoeding is treated like any other work expense, so it runs through the employer’s payroll and HR systems rather than being claimed directly from the government. That creates a few layers of protection against cheating.

Most companies require employees to register their home–work cycling distance (usually via HR software, a mobility platform, or a simple declaration form). That distance is based on the shortest reasonable cycling route, not whatever someone wants to claim. Once it’s registered, it rarely changes unless the employee moves house or workplace.

Employees also have to declare which days they actually cycle. Some companies use apps or digital mobility platforms, while others rely on monthly self‑declarations signed by the worker. Because it’s a formal payroll benefit, giving false information is treated as fraud, just like faking overtime or expenses.

Belgian tax authorities can audit employers, and if abuse is found, both the company and the worker can face repayments, fines, or tax corrections. That risk keeps things honest.

So while it’s not tracked by GPS, the system works because it’s tied to payroll, legal declarations, and real financial penalties — not just goodwill.

Personally, I think this is a brilliant scheme and it really should be expanded around the world!