Bike to Work Scheme
The Cycle to Work Scheme (generally known as the Bike to Work Scheme) is a tax incentive scheme to encourage employees to cycle to work. Under the scheme, an employer can pay for a new bicycle (including bicycle accessories) and the employee then repays the cost in regular instalments from their gross salary.
You are not liable for tax, PRSI or the Universal Social Charge on your repayments.
Your employer does not have to take part in the scheme. However, if they do, they must offer it to all their employees. If you are self-employed, you are not entitled to avail of the Bike to Work Scheme unless you pay PRSI as an employee in addition to your self-employed work.
How do I save money on the Bike to Work Scheme?
As an employee you save on the costs of cycling to work because your repayments come out of your salary before tax, USC and PRSI are deducted. This means that someone on the highest rate of tax will save almost half of the cost of a new bike and equipment.
How much can I spend on the Bike to Work Scheme, and how often can I use it?
There are 3 limits depending on the type of bike you bought. The limit (including related safety equipment) is:
- €3,000 for cargo and ecargo bikes.
- €1,500 for pedelecs and e-bikes.
- €1,250 for other bicycles.
From 1 August 2020 to 31 December 2022 the limit for cargo and ecargo bikes was €1,250 and €1,500 respectively.
Note: A cargo bicycle is a bicycle with a special purpose frame which has been designed to carry heavy loads, or passengers other than the rider. A container or a platform may be integrated into, or attached to, this frame in front of, or behind, the rider. An e-cargo bicycle is a cargo bicycle with a pedelec configuration. A bicycle cannot be converted into a cargo bicycle by simply attaching a container or a trailer. The frame must be specially designed to carry large or heavy loads or passengers.
As an employee, you can use the scheme once every 4 years. The four-year span between tax breaks is counted by tax year. If you bought a bike in 2020, regardless of the month, you could buy a new bike and avail of the next tax relief in January 2024.
What equipment does the Bike to Work Scheme cover?
The scheme covers the following items, which must be bought as new (not second-hand):
- New bikes and pedelecs (electrically assisted bikes that require some effort to propel)
- 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
Child seats, helmets and trailers are not included.
The scheme does not include motorbikes, mopeds, scooters or second-hand bicycles or equipment or bicycle parts or associated equipment.
How do I buy a bike under the Bike to Work Scheme?
You should ask your employer if they run the scheme and check their requirements. They may allow you to select the bicycle and equipment from any shop or only certain bicycles from specific shops. If you are a civil or public servant, the cycle shop must be on the suppliers' list (pdf). You can choose your bike by visiting a bike shop and selecting the bike and equipment that you want to buy. Next, tell your employer of this choice. The employer will then pay the bike shop or supplier for the bike and equipment directly. It’s important to note that your employer cannot reimburse you if you make the payment.
You must sign a written agreement stating that the bike is for your own use, and you will use it for what the Revenue Commissioners consider qualifying journeys: getting to and from work.
Your employer then sets up salary deductions over an agreed time frame of up to 12 months to recoup the costs. These deductions can be made weekly, fortnightly or monthly depending on your salary arrangements.
Please note that your employer must pay for the bicycle. The tax exemption does not apply if you pay for the bicycle and your employer reimburses you.
What if my employer buys me a bike and doesn’t charge me for it?
That is acceptable and under the scheme, you will not be taxed for benefit in kind if you receive a bike from your employer as long as the cost of the bike and equipment does not exceed a total of €1,250, or €1,500 for pedelecs or an e-bike or €3,000 for a cargo or ecargo bike.
You can find out more about the scheme from the Revenue Commissioners.