What Employers and Employees Need to Know About Bicycle Commuter Benefits

This post was originally published August 2025, and last updated February 2026.

Over the last decade, the U.S. has seen bike ridership boom as successful bike share programs, bike lane installations, and other bike-friendly initiatives encouraged people to get out and ride. Booming bike ridership is also changing the way commuters get to work. Here's everything you need to know about offering bicycle benefits to employees.

Are bikes eligible for pre-tax commuter benefits?

No.

Can employers offer any kind of bicycle commute benefit?

Yes! Employers can subsidize their employees' bike commutes; it just has to be taxed as income. Many employers choose to offer a full or partial subsidy for annual bike share memberships, or an amount of cash that can be used towards the cost of renting, purchasing, or maintaining a bicycle.

Learn more about how post-tax benefits work.

Why do I vaguely recall that bikes could be part of a pre-tax benefit?

Because the commuter benefit rules did allow pre-tax bike benefits, but only from 2009-2017, and with many constraints.

After salary, pre-tax benefits are perhaps the next most impactful compensatory tool that employers have to attract and retain employees. When an employee is offered and accepts a pre-tax benefit, the employer withholds a certain amount of the employee’s income before taxes are deducted for the employee to spend on purchases that are qualified as tax-free under federal tax law. Every time the employee spends that pre-tax money, they’re effectively getting an estimated 30% savings  on their purchase (the value of the federal and applicable state and local taxes they would have paid).

In 2008, the Emergency Economic Stabilization Act was signed into law, adding qualified bike expenses as a fourth category, allowing employers to provide their employees with a tax-free subsidy of up to $20 a month for bicycle commuting expenses. This was great news, but the law was far from perfect.

• Bike expenses were eligible for reimbursement by employers, but employees could not use their pre-tax salary to pay for their expenses.
• $20 a month was much less than commuters could spend on transit and parking, which at the time was $225 per month, each.
• Commuters could only receive the bike benefit if they gave up transit and parking benefits. Bikes were the only category with this restriction.
• The law only covered personal bicycles. It didn’t cover bikeshare.
• Unlike the other commuter benefits, the monthly amount was fixed and did not increase over time the way the other benefits did.

Then in 2017, the Tax Cuts and Jobs Act suspended the bike commuter benefit until 2026. In 2025, the bike benefit was officially eliminated under the One Big Beautiful Bill Act, meaning that bike expenses are no longer tax-free commuting expenses. While legislation like the Bicycle Commuter Act, introduced by Senators Peter Welch (D-Vt.) and Alex Padilla (D-Calif.) aims to expand bike benefits in the workplace in the future, it is unlikely that the benefit will be restored in the near future.

How can employers offer bike benefits to employees?

The end of the federal pre-tax bike benefit was a loss, but it freed employers from the constraints of the pre-tax rules. Employers can now offer as large a bike benefit as they want, to cover whatever services they deem useful, with no restrictions other than taxing the benefit as compensation. Examples include:

• The City of Boston gives free bikeshare memberships to city employees.
• Microsoft offers its employees a $900 per year “Stay Fit” allowance for expenses related to biking.
• Sonos pays their employees cash for riding their bikes to the office, up to $5 a day.

Interested in offering bike benefits to your employees? Jawnt can help your team design and implement the right bike benefit for your employees and locations. In addition to crafting subsidy, spending, and reimbursement rules, we partner with several operators across the United States to offer the best local service, including:

• Annual memberships with local bikeshare companies, such as Citi Bike in NYC and Indego in Philadelphia.
• Micromobility rental companies, including RidePanda and Unagi
• Mobile bike repair services, such as Nemo in Boston

To learn more, get in touch!