Cycle to Work Scheme

The Government introduced a tax incentive in 2009 for people who wish to purchase a bicycle and cycling equipment so they can ditch the car and bike to work.

Under this scheme an employer is allowed to incur the expense of providing an employee with a new bicycle and bicycle safety equipment. This is tax deductible.

The aims of the Scheme are to encourage staff to cycle to work for both environmental and health reasons. The bicycle and safety equipment provided must be used by the employee mainly for journeys between the employee’s home and normal place of work, or between his or her normal place of work and another place of work.

For employees the scheme covers bicycles and accessories up to a maximum cost of €1,000. You can avail of the scheme once in every 5 years. Even if you don’t use the whole €1000 allowance with your purchase, you can’t make a second claim for 5 years, so think carefully about what your cycling needs will be for the next 5 years, before you make your application.

How the cycle-to-work scheme works

The employer purchases the bike and the employee pays the sum back through a salary deduction. You can do this over a period of up to 12 months. The repayment is made before tax and PRSI are applied.

NB: The employer must purchase the bike – bikes/ equipment purchased by the employee do not qualify for tax relief under the scheme.

Your employer may only deal with a few selected local cycle shops; if so, you will have to buy from one of these in order to avail of the scheme. So your starting point is to check with your employer if they have a list of local cycle shops with which they have an arrangement to supply an invoice. You can then visit one of the listed shops and selects the bike/ gear you wish to purchase. You then apply to your employer to be included on the scheme. The employer will then confirm the order with the cycle shop, which will invoice your employer directly. You can then return to the shop to collect the goods. The employer then deducts the cost from your salary as agreed (you may be offered several options for repaying the cost, for example to spread the deductions over several months).

If you wish to find out more about the scheme, visit the Revenue Commissioner’s website.

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