What is the Cycle 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 installments from their gross salary.
You are not liable for tax, PRSI or the Universal Social Charge on your repayments, thus, depending on your tax bracket, you can save up to 52% on your purchase.
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 cycle 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 you spend on the Bike to work scheme, and how often can you 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.
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 purchased 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
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 using the bike to work scheme?
You should ask your employer if they operate the scheme and check their requirements. Also, make sure they allow you to use Duff Cycles to purchase through. Alternatively, we are happy to sign up to an employer's supplier list so that we can service your company going forward.
You can choose your bike by visiting us in store or online and select the bike and equipment that you want to buy. We will supply you with an invoice for the bike and extras you have selected.
Next, you hand this invoice in to your employer. The employer will then pay us via EFT, or a supplier scheme (such as Tax free bikes, Tax Saver bike, Travel Hub or Cycle Scheme) for the bike and equipment directly, who will in turn issue you with a voucher with a code and pin stated on it. One we receive the voucher, or the bank transfer, we are able to release the bike, given that it is in stock.
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.