New Zealand is at an inflection point in how its people move. Fuel costs are rising, congestion is worsening, and pressure on businesses to take meaningful climate action has never been stronger.
At the same time, employees are making a shift. More people are looking for ways to commute that cost less, feel better, and align with values they actually hold. Cycling and active commuting are no longer niche choices — they are a growing expectation.
Forward-thinking New Zealand employers are already responding. They are offering a ride to work scheme: a practical, tax-efficient benefit that lets employees access a bike or e-bike through salary sacrifice, fully exempt from Fringe Benefit Tax (FBT) since April 2023.
This article explains what the ride to work scheme is, how it works in New Zealand, and why offering it is quickly becoming a baseline expectation for employers who take their people seriously.
A ride to work scheme is an arrangement that allows employees to access a bike or e-bike through their employer, typically via salary sacrifice. The employee agrees to reduce their gross salary by the cost of the bike, meaning the purchase is made from pre-tax income. The result is a meaningfully lower net cost compared to buying the same bike at retail.
In New Zealand, this arrangement is made significantly more attractive by the FBT exemption introduced in April 2023. Employees using Northride's scheme save between 15 and 40 percent on the cost of their bike, depending on their salary, tax situation and the price of the bike.
From 1 April 2023, bikes and e-bikes provided by employers to employees for commuting are exempt from Fringe Benefit Tax (FBT) in New Zealand. This applies to pedal cycles and electric bikes used mainly (over 50%) for travel between home and work.
Before this exemption, employer-provided bikes were treated as a taxable fringe benefit, which reduced the attractiveness of offering them. The exemption removes this barrier entirely, making the bike scheme one of the most cost-effective workplace benefits available in New Zealand today.
Key facts about the NZ FBT exemption for bikes:
Salary sacrifice is an arrangement where an employee agrees to give up part of their gross salary in exchange for a non-cash benefit, in this case a bike or e-bike. Because the sacrifice comes from pre-tax income, the employee pays less income tax and ACC levies on the reduced salary.
Combined with the FBT exemption, the savings are meaningful. The cost of the bike is spread across an agreed period, typically 24 months, through automatic payroll deductions. At the end of the term, the employee can either redeem the bike for 10% of its original retail value, or return it and start a new contract with a different bike.
The scheme is cost-neutral for employers. There are no setup fees or prepayments for businesses that partner with Northride. Northride charges a small admin fee per month per bike, which is offset by savings on KiwiSaver and ACC levies, meaning the net cost to the employer is effectively zero, depending on the bike price. For a detailed breakdown of how salary sacrifice interacts with the FBT exemption Deloitte NZ's FAQ, is a useful reference.
Northride manages the bike scheme's end-to-end process and finances every bike directly — bikes never sit on the employer's balance sheet, and employees are not subject to a credit check. Bike cover and maintenance can be added to the package or handled independently, depending on what works best for your team. Employers always have access up to date automatic reporting, support and flexibility for changing work environments eg. early exit situations such as resignation and parental leave.
New Zealand's cities are under real pressure. Congestion costs, rising fuel prices, and growing expectations around sustainability are converging at the same time.
The policy response exists. Auckland is the clearest example: its Transport Emissions Reduction Pathway (TERP), adopted by Auckland Council in 2022, sets out 11 areas for transforming the city's transport system, with cycling and active travel at the top of the list. As Greater Auckland recently analyzed, the plan is clear and the case is strong, but institutional momentum at the policy level has been slow.
The lesson for New Zealand employers is simple: do not wait for infrastructure or government policy to catch up. An organisation can decide this month to offer a bike scheme, communicate it to employees next month, and have people commuting differently shortly after.
Employers are the fastest-moving lever in New Zealand's transport transition, and they can act without a council vote or a government budget.
Active commuting is consistently linked to better mental health, lower absenteeism, and higher job satisfaction. A large-scale study published in BMJ Public Health, found that cyclists had a 47 percent lower risk of death from any cause compared with non-active commuters, and were significantly less likely to be prescribed medication for poor mental health.
Data from organisations already running a ride to work scheme shows that 85 percent of participants saw direct health benefits, 79 percent cycled more after joining, half reduced their car use, and active commuters have average 4.5 fewer sick days per year..
Employee commuting sits within scope 3 emissions for most organisations. Enabling cycling commutes is a measurable, reportable action that supports sustainability goals. It's not a pledge. It's a programme with a receipt.
As cost of living pressures increase across New Zealand, salary sacrifice arrangements that reduce employees' tax burden are a meaningful way to deliver value without increasing base salary. The bike scheme is one of the few tools that achieves this simply and compliantly.
Organisations that offer progressive, practical benefits attract people who think the same way. A bike scheme signals something about company culture that a standard perks list does not.
The ride to work scheme sits at the intersection of several functions:
HR and People & Culture teams are the natural home for this benefit. It sits alongside wellbeing programmes, commuter support, and employee value proposition work.
Sustainability and ESG leads can use the scheme as a reportable action under scope 3 emissions initiatives.
Finance teams need to understand the salary sacrifice mechanics, which are straightforward but require a small payroll process change. Northride provides the documentation and employer guidance to make this easy. Direct integrations with popular HR and PR systems are also possible.
Download the comprehensive guide for HR >>
Under the NZ FBT exemption, the following are covered:
The key requirement is that the bike is primarily used for travel between home and work. Employees don't have to commute every single day, and the bikes can be used freely during their free time too. Northride's partner shops span New Zealand, so employees can choose a bike that suits their commute and lifestyle. The most important thing is that the bike and accessories best suit the employees' individual commuting needs.
Read how to choose perfect bike for commuting >>
New Zealand has the policy framework. The FBT exemption has removed the tax barrier. The demand from employees is growing. What remains is for organisations to decide to act.
A ride to work scheme is a low-cost, high-impact benefit that your employees will notice, your sustainability report will reflect, and your organisation can point to as a concrete contribution to the kind of country and cities we all want to live in.
The bike scheme is not a future initiative. It is available now, to every employer in New Zealand, starting this month.
Let's discuss your options — book a meeting >>