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 €1250, inclusive of VAT. Electric bikes €1500, and also now Electric Cargo bikes €3000. 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 €1,250 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.

You can only get a replacement bike through the Bike 2 Work scheme every 4 years. 

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