Taxation of employer benefits
Cycle to Work Scheme
This scheme aims to encourage you to cycle to and from work. Under the scheme your employer can buy a bicycle and safety equipment for you. This benefit will not be taxable.
There are three limits, depending on the type of bicycle purchased.
- €3,000 on cargo and ecargo bikes
- €1.500 on pedelecs and ebikes
- €1,250 for other bikes.
The above limits include related safety equipment.
Prior to 1 August 2020 the limit for all bicycles and safety equipment was €1,000.
From 1 August 2020 to 31 December 2022 the limit for cargo and ecargo bikes was €1,250 and €1,500 respectively.
The purchase can be made in any cycle shop. If you are a civil or public servant, the cycle shop must be on the suppliers list.
Your employer does not have to take part in the scheme.
What bicycles and equipment are included?
New bicycles and pedelecs (electrically assisted bicycles which require some effort from the cyclist).
Cargo and ecargo bicycles with a frame specially designed to carry heavy loads or passengers.
The scheme does not cover:
- motorbikes, scooters or mopeds
- second-hand bicycles or equipment
- bicycle parts or associated equipment.
The following new safety equipment, if purchased with the bicycle, are also covered:
- cycle helmets
- bells and bulb horns
- lights, including dynamo packs
- mirrors and mudguards
- cycle clips and dress guards
- panniers, luggage carriers and straps
- locks and chains
- pumps, puncture repair kits, cycle tool kits and tyre sealant
- reflective clothing, white front reflectors and spoke reflectors.
Child seats, helmets and trailers are not included.
How do I get a bicycle?
Ask your employer if they operate the scheme and their requirements. For example, what type of bicycle and equipment and from which shop.
Your employer can arrange a 'salary sacrifice' over an agreed time, not more than 12 months. If so, you give up an agreed amount of your gross salary to cover the cost of the bicycle. You only pay Income Tax (IT), Universal Social Charge (USC) and Pay Related Social Insurance (PRSI) on the balance of your salary.
Your employer may buy the bicycle and not require you to pay for it. In this case, you will be exempt from tax on the benefit of the cost of the bicycle up to the relevant limits.
If the cost is more than these limits IT, USC and PRSI will apply to the excess.
The tax exemption does not apply if you pay for the bicycle and your employer reimburses you. Your employer must pay for the bicycle.
How often can I use the scheme?
Once every four years (five years prior to 1 August 2020). This applies even if the cost of the bicycle and safety equipment was less than the relevant limits.
The tax year in which the bicycle is provided counts as the first year. For example, if you used the scheme during any month in 2020, you can use it again from 1 January 2024.
The scheme only applies to qualifying journeys. This means the whole or part of a journey between your home and your normal place of work.
Your employer will ask you to sign a statement stating that the bicycle:
- is for your own use
- will be mainly used for qualifying journeys.