CYCLE SCHEME / BIKE TO WOTK SCHEME
The Cycle Scheme, also known as the Bike to Work Scheme, is a remarkable initiative in Ireland designed to promote cycling as a greener and healthier mode of transportation for employees. This tax incentive program encourages employers to support their staff in acquiring bicycles and related accessories by facilitating the cost through convenient salary deductions.
By participating in the Bike to Work Scheme, employees can enjoy notable financial advantages. The scheme allows for salary deductions to be made before tax, USC, and PRSI are calculated. Consequently, this results in substantial savings, particularly for individuals falling under the higher tax brackets. In fact, such individuals can save close to half the cost of a new bike and accompanying equipment.
Understanding Purchase Limits
The Cycle Scheme imposes limits on the amount that can be spent on different types of bicycles. These limits, inclusive of safety equipment, are as follows:
- Cargo and ecargo bikes: Up to €3,000.
- Pedelecs and e-bikes: Up to €1,500.
- Other bicycles: Up to €1,250.
It’s important to note that between August 1, 2020, and December 31, 2022, the limits for cargo and ecargo bikes were adjusted to €1,250 and €1,500 respectively.
Eligibility and Utilization
Employees can avail themselves of the Bike to Work Scheme once every four years, with the timeframe being calculated based on tax years. For example, if an individual purchased a bike in 2020, regardless of the specific month, they will be eligible for a new bike and tax relief starting from January 2024.
The Cycle Scheme covers a wide range of essential items, provided they are purchased new and not second-hand. These items include:
- New bikes and pedelecs (electrically assisted bikes).
- Cycle helmets.
- Bells and bulb horns.
- Lights (including dynamo packs).
- Mudguards and skirt guards.
- Cycle clips.
- Panniers, luggage carriers, and straps.
- Locks and chains.
- Puncture repair kits, cycle tool kits, and tyre sealant.
- Reflective clothing.
- Bike reflectors.
It’s important to note that child seats, helmets, and trailers are not covered under the scheme. Additionally, motorbikes, mopeds, scooters, second-hand bicycles, and associated equipment or parts are not eligible.
To participate in the Bike to Work Scheme, employees should inquire with their employers to determine if they offer the scheme and the specific requirements involved. Employers may allow employees to choose their bicycle and accessories from any store or restrict the selection to designated shops. Civil or public servants must select their bikes from suppliers listed in the provided document (pdf). Once the bike and equipment have been selected, employees must inform their employer of their choice. The employer will then directly pay the bike shop or supplier, and employees should note that reimbursement is not possible if they make the payment themselves.
To formalize the agreement, employees must sign a written declaration stating that the bike is for personal use and will be primarily utilized for qualifying journeys, as determined by the Revenue Commissioners. These journeys pertain to commuting to and from work.
Repayment of the bike’s cost will be set up by the employer through salary deductions over a mutually agreed timeframe of up to 12 months. The frequency of deductions, whether weekly, fortnightly, or monthly, will depend on the individual’s salary arrangements.
For More Information
You can find out more about the scheme from ” the Revenue Commissioners. “