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Bike to Work Scheme
The bike to work Scheme or Cycle to Work scheme aims to encourage you to cycle to and from work. Under the scheme your employer can buy a bicycle and safety equipment for you. This benefit will not be taxable.
There are three limits, depending on the type of bicycle purchased.
- €3,000 on cargo and Ecargo bikes
- €1.500 on pedelecs and ebikes
- €1,250 for other bikes Road Bike, Mountain Bike or Regular Bikes.
The above limits include related safety equipment.
Your employer does not have to take part in the scheme.
Click the examples below to see more info on how you can save:
Bike to Work Savings Examples Regular Bike
Example of savings possible as a Basic rate taxpayer (20%) PAYE income Tax 8%, USC 4% PRSI
| Basic Rate Taxpayer : 20% Tax + 8% USC + 4% PRSI = 31% | |||
| Cost of Regular Bike | €750 | €1,000 | €1,250 |
| Tax Relief Saving % | 31% | 31% | 31% |
| Tax Relief Saving | €233 | €310 | €387 |
| Net Cost | €518 | €690 | €863 |
| Actual savings will depend on each individuals personal circumstances. | |||
Example of savings possible as both a Higher rate taxpayer (40%): PAYE income Tax 8%, USC 4% PRSI
| Higher Rate Taxpayer : 40% Tax + 8% USC + 4% PRSI = 52% | |||
| Cost of Regular Bike | €750 | €1,000 | €1,250 |
| Tax Relief Saving % | 51% | 51% | 51% |
| Tax Relief Saving | €383 | €510 | €635 |
| Net Cost | €368 | €490 | €615 |
| Actual savings will depend on each individuals personal circumstances. | |||
Bike to Work Savings Examples Electric Bike
Example of savings possible as a Basic rate taxpayer (20%) PAYE income Tax 8%, USC 4% PRSI
| Basic Rate Taxpayer : 20% Tax + 8% USC + 4% PRSI = 31% | |||
| Cost of Electric bike | €1,500 | ||
| Tax Relief Saving % | 31% | ||
| Tax Relief Saving | €465 | ||
| Net Cost | €1,035 | ||
| Actual savings will depend on each individuals personal circumstances. | |||
Example of savings possible as a Higher rate taxpayer (40%) PAYE income Tax 8%, USC 4% PRSI
| Higher Rate Taxpayer : 40% Tax + 8% USC + 4% PRSI = 52% | |||
| Cost of Electric bike | €1,500 | ||
| Tax Relief Saving % | 51% | ||
| Tax Relief Saving | €780 | ||
| Net Cost | €720 | ||
| Actual savings will depend on each individuals personal circumstances. | |||
Bike to Work Savings Examples Cargo Bike
Example of savings possible as a Basic rate taxpayer (20%) PAYE income Tax 8%, USC 4% PRSI
| Basic Rate Taxpayer : 20% Tax + 7% USC + 4% PRSI = 31% | |||
| Cost of Electric bike | €3,000 | ||
| Tax Relief Saving % | 31% | ||
| Tax Relief Saving | €930 | ||
| Net Cost | €2,070 | ||
| Actual savings will depend on each individuals personal circumstances. | |||
Example of savings possible as a Higher rate taxpayer (40%) PAYE income Tax 8%, USC 4% PRSI
| Basic Rate Taxpayer : 40% Tax + 8% USC + 4% PRSI = 31% | |||
| Cost of Electric bike | €3,000 | ||
| Tax Relief Saving % | 51% | ||
| Tax Relief Saving | €1560 | ||
| Net Cost | €1440 | ||
| Actual savings will depend on each individuals personal circumstances. | |||
What bicycles and equipment are included?
New bicycles and pedelecs (electrically assisted bicycles which require some effort from the cyclist). Cargo and Ecargo bicycles with a frame specially designed to carry heavy loads or passengers
The following new safety equipment, if purchased with the bicycle, are also covered:
- Cycle Helmets
- Bells and Bulb Horns
- Lights, including Dynamo Packs
- Mirrors and Mudguards
- Cycle Clips and Dress Guards
- Panniers, Luggage Carriers and Straps
- Pumps, Puncture Repair Kits, Cycle Tool Kits and Tyre Sealant
- Reflective Clothing, White Front Reflectors and Spoke Reflectors.
The scheme does not cover:
- Motorbikes, Scooters or Mopeds
- Second-hand Bicycles or Equipment
- Bicycle Parts or Associated Equipment
QUESTIONS?
- Ask your employer if they operate the Bike To Work Scheme. if yes
- Pop into Clifden Bike Shop Pick your perfect New Bike and safety equipment.
- We will give you an invoice for the bike and items you have picked.
- Give the invoice to your HR team and they will take care of the rest.
- Once the bike has been paid for Clifden Bike Shop will give you your brand New Bike.
Your employer can arrange a ‘salary sacrifice’ over an agreed time, not more than 12 months. If so, you give up an agreed amount of your gross salary to cover the cost of the bicycle. You only pay Income Tax (IT), Universal Social Charge (USC) and Pay Related Social Insurance (PRSI) on the balance of your salary.
Your employer may buy the bicycle and not require you to pay for it. In this case, you will be exempt from tax on the benefit of the cost of the bicycle up to the relevant limits.
If the cost is more than these limits IT, USC and PRSI will apply to the excess.
Note:
The tax exemption does not apply if you pay for the bicycle and your employer reimburses you. Your employer must pay for the bicycle.
Once every four years (five years prior to 1 August 2020). This applies even if the cost of the bicycle and safety equipment was less than the relevant limits.
The tax year in which the bicycle is provided counts as the first year. For example, if you used the scheme during any month in 2020, you can use it again from 1 January 2024.
