Taxation of employer benefits

Cycle to Work Scheme

This scheme encourages cycling 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.

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.

Note

The tax exemption does not apply if you pay for the bicycle and your employer reimburses you. Your employer must pay for the bicycle.

Your employer does not have to take part in the scheme.

What is included?

The scheme covers:

• new bicycles and pedelecs
• 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 which conform to European standard EN 1078
• 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.

Payment

Your employer can arrange a 'salary sacrifice' over an agreed time, lasting 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 will only pay Income Tax, Universal Social Charge (USC) and Pay Related Social Insurance (PRSI) on the balance of your salary.

You will be exempt from tax on the benefit of the bicycle cost up to the relevant limits where your employer:

• buys the bicycle
• and
• does not require you to pay for it.

If the cost is more than these limits, Income Tax, USC and PRSI will apply to the excess.

How often can I use the scheme?

You can use the scheme once every four years.

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 2022, you can use it again from 1 January 2026.

Qualifying journeys

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
• and
• will be mainly used for qualifying journeys.

Value Added Tax (VAT) on bicycles or safety equipment purchased

The employer must pay VAT on bicycles or safety equipment purchased. The employer cannot claim VAT back as the equipment is not used for the purposes of taxable supplies.

Employer Records

All records in relation to this scheme can be examined by Revenue as part of normal inspections.

Failing to operate the scheme correctly will result in the benefits being withdrawn from both the employer and employee.