Bike to Work

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.

The scheme applies to bikes and equipment up to the value of €1,250 and ‘e-bikes’ and related safety equipment up to the value of €1,500.

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 2017, regardless of the month, you could buy a new bike and avail of the next tax relief in January 2021.

The scheme covers the following items, which must be purchased as new (not second-hand):

• New bikes and tricycles
• New electric bikes (electrically-assisted bikes that require some effort to propel)
• Cycle helmets
• Bells and horns
• Lights (including dynamo packs)
• Mirrors
• Mudguards and skirt guards
• Cycle clips
• Panniers, luggage carriers and straps
• Locks and chains
• Pumps
• Puncture repair kits and cycle tool kits
• Reflective clothing
• Bike reflectors

The scheme does not include motorbikes, mopeds, scooters or electric-bike conversion kits.

You can choose your bike by visiting a bike shop and selecting the bike and equipment that you want to buy. Next, inform your employer of this choice. The employer will then pay the bike shop or supplier for the bike and equipment directly. It’s important to note that your employer cannot reimburse you if you make the payment.

You must sign a written agreement stating that the bike is for your own use and you will use it for what the Revenue Commissioners consider qualifying journeys: getting to and from work.

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.

That is acceptable and under the scheme you will not be taxed for benefit in kind if you receive a bike from your employer as long as the cost of the bike and equipment does not exceed a total of €1,250 or €1,500 for an e-bike.

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 €1,250 or, in the case of a pedelec or ebike, €1,500.

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 2016, you can use the scheme again from 1 January 2020.