Cycle to Work Scheme
Introduction
The Cycle to Work Scheme is a tax incentive scheme which aims to encourage employees to cycle to and from work. Under the scheme employers can pay for bicycles and bicycle equipment for their employees and the employee pays back through a salary sacrifice arrangement of up to 12 months. The employee is not liable for tax, PRSI, levies or the Universal Social Charge on their repayments.
Your employer does not have to take part in the scheme. However, if they do, they must offer it to all their employees.
What equipment does the scheme apply to?
The scheme applies to new bicycles and pedelecs (electrically assisted bicycles which require some effort from the cyclist). It does not cover motorbikes, scooters or mopeds. You can avail of the scheme up to a maximum of €1,250 for a regular push bike or €1,500 for an electric bike or €3,000 for a cargo e-bike.
Purchase of the following new safety equipment is also covered:
- Cycle helmets which conform to European standard EN 1078
- Bells and bulb horns
- Lights, including dynamo packs
- Mirrors and mudguards to ensure that the rider’s visibility is not impaired
- Cycle clips and dress guards
- Panniers, luggage carriers and straps to allow luggage to be safely carried
- Locks and chains to ensure cycle can be safely secured
- Pumps, puncture repair kits, cycle tool kits and tyre sealant to allow for minor repairs
- Reflective clothing along with white front reflectors and spoke reflectors
How do I pay for the bicycle?
Usually, your employer pays the supplier for the bicycle and sets up a ‘salary sacrifice’ arrangement from your salary over an agreed time frame (which cannot be more than 12 months). This generally means that you visit the shop, select the equipment you wish to buy and have the shop invoice your employer directly for the cost. Note that the tax exemption does not apply if you pay for the bicycle and are reimbursed by your employer – they must pay for the bicycle.
The repayment for the bicycle and equipment is then deducted from your gross salary (this means before income tax, PRSI, pension levies or Universal Social Charge are deducted). These deductions can be made weekly, fortnightly or monthly depending on your salary payment arrangement. It can be availed of every 4 years but it’s not attached to a calendar date so for instance if you availed of it in November 2022 you could avail next of it again any time from January 2026.
Rates
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 bikes
Step 1: Check with your employer
Ask your employer if they run the scheme and check their requirements. They may allow you to select the bike and equipment from any shop or only certain bikes from specific shops.
NOTE: If you are a civil or public servant, the cycle shop must be on the suppliers' list (pdf).
Step 2: Choose your bike with the supplier
You can choose your bike by visiting a bike shop and selecting the bike and equipment that you want to buy.
Step 3: Inform your employer of your choice and they pay for the bike directly
Tell your employer of this choice. The employer will then pay the bike shop or supplier for the bike and equipment directly.
Step 4: Sign an agreement with your employer
You must sign a written agreement stating that the bike is for your own use, and that you will use it for what Revenue consider qualifying journeys: getting to and from work.
Step 5: You repay your employer in instalments
Your employer then sets up salary deductions over an agreed period of up to 12 months to recover the costs.
Depending on your salary arrangements, these deductions can be made weekly, fortnightly or monthly.
Do not pay for the bike directly
Please note that your employer must pay for the bike. The tax exemption does not apply if you pay for the bike and your employer reimburses you.