The Cycle to Work Scheme is a tax incentive scheme which aims to encourage employees to cycle to and from work. Under the scheme employers can pay for bicycles and bicycle equipment for their employees and the employee pays back through a salary sacrifice arrangement of up to 12 months. The employee is not liable for tax, PRSI, levies or the Universal Social Charge on their repayments.Your employer does not have to take part in the scheme. However if they do, they must offer it to all their employees.
What are the rules:
What equipment does the scheme apply to?
The scheme applies to new bicycles and pedelecs (electrically assisted bicycles which require some effort from the cyclist). It does not cover motorbikes, scooters or mopeds. Purchase of the following new safety equipment is also covered: - Cycle helmets which conform to European standard EN 1078 - Bells and bulb horns - Lights, including dynamo packs - Mirrors and mudguards to ensure that the rider’s visibility is not impaired - Cycle clips and dress guards - Panniers, luggage carriers and straps to allow luggage to be safely carried - Locks and chains to ensure cycle can be safely secured - Pumps, puncture repair kits, cycle tool kits to allow for minor repairs - Reflective clothing along with white front reflectors and spoke reflectors
How do I pay for the bicycle?
Usually your employer pays the supplier for the bicycle and sets up a ‘salary sacrifice’ arrangement from your salary over an agreed time frame (which cannot be more than 12 months). This generally means that you visit the shop, select the equipment you wish to buy and have the shop invoice your employer directly for the cost. Note that the tax exemption does not apply if you pay for the bicycle and are reimbursed by your employer – they must pay for the bicycle. The repayment for the bicycle and equipment is then deducted from your gross salary (this means before income tax, PRSI, pension levies or Universal Social Charge are deducted). These deductions can be made weekly, fortnightly or monthly depending on your salary payment arrangement. Your employer can also buy the bicycle on your behalf and not require you to pay for it. You can only avail of the scheme once in a five-year period. This applies even if you do not purchase equipment up to the €1,000 limit.
Which bicycle journeys qualify?
You must use the bicycle and safety equipment mainly for qualifying journeys. This means the whole or part (for example between home and train station) of a journey between your home and your normal place of work. Employers do not have to monitor this but you will be asked to sign a statement saying that the bicycle is for your own use and will be mainly used for qualifying journeys.
What are the rates?
There is a limit of €1,000 on the amount that can be spent (this includes bicycles, safety equipment and delivery charges). If you spend more than this limit you are liable for a benefit-in-kind income tax charge. You can find out more about the scheme on the Revenue Commissioner’s website.
Where can I get a list of local Bicycle Shops taking part in the Cycle to Work Scheme?
Search 'Bicycle Shops' on this website or click here. Feel free to visit, email or call the shops or view their online stores.
How do I apply?
Contact your local bike shop, employer / HR Department to ask about the Cycle to Work - Scheme or follow the links below.
Information for Employees:
Visit: www.revenue.ie or www.citizensinformation.ie
and search ‘Cycle to Work’ or
Call: 1890 22 24 25
Information for Employers:
Search ‘cycle to work’ at:
www.revenue.ie or http://ogp.gov.ie/
Call: 1890 25 45 65
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