Bike to Work Scheme
Pedal to Perks: Ride, Save, Thrive!
What is it?
The Cycle to Work Scheme or Bike to Work Scheme in Ireland is a government initiative designed to encourage employees to commute by bicycle, promoting both environmental sustainability and personal health. By participating in the scheme, employees can acquire bicycles and related safety equipment tax-free, leading to significant cost savings.
How the Scheme Works
Under this scheme, your employer purchases a new bicycle and safety equipment on your behalf. You then repay the cost through regular instalments deducted from your gross salary before taxes, including income tax, PRSI, and the Universal Social Charge (USC), are applied. This pre-tax deduction results in considerable savings, especially for those in higher tax brackets. It's important to note that employer participation is voluntary, but if they choose to offer the scheme, it must be available to all employees.
Financial Limits and Frequency
The scheme sets specific spending limits based on the type of bicycle:
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€3,000 for cargo and ecargo bikes.
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€1,500 for pedelecs and e-bikes.
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€1,250 for other bicycles.
These amounts include the cost of related safety equipment. Employees can avail of the scheme once every four years.
Eligible Equipment
The scheme covers new bicycles and pedelecs (electrically assisted bicycles requiring some effort from the cyclist). It also includes cargo and electric cargo bicycles designed to carry heavy loads or passengers. Second-hand bicycles, motorbikes, scooters, and mopeds are excluded. Eligible safety equipment encompasses items such as helmets, lights, locks, reflective clothing, and more. Read more on this blog.
Employer and Employee Benefits
For employees, the primary advantage lies in the tax savings, which can amount to up to 52% off the retail price of a new bicycle and equipment, depending on your tax rate. Employers also benefit by saving 11.05% on PRSI contributions. Additionally, promoting cycling can lead to a healthier, more punctual workforce.
Steps to Participate
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Check Employer Participation: Confirm whether your employer offers the Cycle to Work Scheme.
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Select Your Bicycle and Equipment: Choose your desired bicycle and eligible safety accessories from a participating retailer.
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Employer Purchase: Your employer purchases the selected items on your behalf.
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Salary Deduction Agreement: Agree to a salary sacrifice arrangement, where the cost is deducted from your gross salary over a maximum of 12 months.
By following these steps, you can enjoy the financial and health benefits of cycling to work while contributing to a more sustainable environment.
You can always find more information in this link.