Bike 2 work scheme

Introduction

1 January 2009 the government introduced a cycle to work scheme which allowed employers to provide their employees with a bicycle and/or safety equipment without the employee being liable for benefit in kind taxation provided the bicycle is used for whole or part of a journey between home and their place of work, or between places of work.  95% of our Bike 2 Work clients use the bikes bought through this scheme for their own leisure use and the government does not look in too closely for evidence that the bike is being used for their journey to work.  The scheme covers bicycles and cycle safety equipment up to a maximum cost of €1000, inclusive of VAT.  Most companies provide an interest free loan that spreads the cost over six to twelve months.

Main Steps

How does this work?

Got questions?

The total cost of the bicycle and safety equipment, up to the value of €1,000 inclusive of VAT, will be deducted from your gross salary, over a period of six to twelve months.  This is the most popular repayment period.  The ‘loan repayment’ will not be subject to income tax, PRSI or income levy.

Actual savings will depend upon your personal tax circumstances, estimated savings are outlined below.

Higher Rate Taxpayer: 41% Tax + 8% PRSI + 2% Income Levy = 51%

Cost of bicycle and safety equipment€250€500€750€1000
Tax relief saving %51%51%51%51%
Tax relief saving €€127.50€255.00€382.50€510.00
Net cost to employee€122.50€245.00€367.50€490.00

Lower Rate Taxpayer: 20% Tax + 8% PRSI + 2% Income Levy = 30%

Cost of bicycle and safety equipment€250€500€750€1000
Tax relief saving %30%30%30%30%
Tax relief saving €€75.00€150.00€225.00€300.00
Net cost to employee€175.00€350.00€525.00€700.00

The following is a list of the equipment which is covered:

No, as per the Revenue requirements, the bicycle and equipment provided must be unused and not second hand.

We strongly advise you to deal directly with the bicycle shop and not to get involved with a third party e.g. Raleigh, Bike2Work or Bike to work Ltd., Tax Free Bikes, One For All.

These parties charge a 10% commission for using them, we are listed on their web sites and will accept their vouchers, but you may wait longer and get less.

You may see the 3rd party’s bank, tax and VAT details pre-printed on forms you download. However, if you use the bike shop directly and use their bank, tax and VAT details instead, your Bike 2 Work request will be processed quicker and it will be cheaper for you.

You can only get a replacement bike through the Bike 2 Work scheme every 5 years. 

Once the transaction is complete, your bicycle shop will look after all queries and warranty