On your bike for commuter tax benefits in Europe

BRUSSELS Tue Jun 21, 2011 12:06pm EDT

Cyclists ride past puddles after a thunderstorm in central London, May 26, 2011. REUTERS/Phil Noble

Cyclists ride past puddles after a thunderstorm in central London, May 26, 2011.

Credit: Reuters/Phil Noble

BRUSSELS (Reuters Life!) - Getting paid for going to work may sound too good to be true, but it's part of an increasingly popular scheme for commuters across Europe.

Employers in Belgium, the Netherlands and other European countries are rewarding staff if they come to work on a bicycle, paying them for every kilometer they cycle, all in an effort to promote environmentalism, not to mention a healthier lifestyle.

In Belgium, cycling commuters are being paid 20 euro cents(29 U.S. cents) per kilometer, where as those in the Netherlands can earn 15 cents and participants in Britain up to 20 pence (32 U.S. cents) per mile -- all of it tax-free.

In Belgium, a popular cycling nation and home to five-time Tour de France and Giro D'Italia winner Eddie Merckx, finance ministry figures show that more than 270,000 people took part in the scheme last year, up from 140,000 in 2006.

Last year, that meant the Belgian tax man paid out 43 million euros ($62 mln) to those who bill for cycling to work.

"Higher oil prices and environmental awareness contribute to having more cyclists on the road," said Dieter Snauwaert, coordinator of the bike-to-work scheme of the Flemish cyclists' union in Belgium.

One of the most successful corporate proponents has been Belgian discount supermarket chain Colruyt, which launched the policy four years ago and now has 2,100 participants.

Colruyt provides employees who live up to 7 km away from work with a bicycle and takes care of maintenance.

Company spokesman Victor De Meester said that apart from employees being healthier there were also other advantages.

"The more people cycle to work the fewer parking spaces you have to offer. It's not so easy, especially in urban areas, to expand parking spaces," he said.

Colruyt, which has more than 22,000 employees, is now looking to target those who live further away than 7 km by offering electric bicycles to make it easier to negotiate larger distances.

"Our target is 400 participants by 2015 but given the response we have had so far this may be too low a number," De Meester said.

Colruyt's belief that employees who cycle to work are healthier than their colleagues who don't is backed up by research from Dutch organization TNO.

The researcher found that over the course of a year, cycling employees on average lose one working day less due to illness than employees who commute by other means.

If the number of workers who cycle to work increased by one percent, Dutch employers would save a total of 27 million euros per year, TNO said.

(Reporting by Robert-Jan Bartunek, editing by Paul Casciato)

($1=.6971 Euro)