The cycle to work Ireland scheme offers a practical way for employees to save money on a new bike while promoting healthier, eco-friendly travel.
- What is the cycle to work scheme and how it works
- Essential bicycle and safety equipment covered by the scheme
- How salary sacrifice and tax breaks support tax free benefits
- The role of cycle shops and written agreements in the scheme
Understanding how the work scheme cycle functions and what safety equipment it covers helps both employers and employees benefit from tax relief and exemptions.
What is the cycle to work scheme and how it works
Cycle to work Ireland encourages employees to cycle to work by offering tax savings on new bikes and equipment. Through a salary sacrifice arrangement, the employee’s gross salary is reduced, lowering income tax and PRSI. The scheme covers qualifying journeys and requires a written agreement between employer and employee. The scheme limits the purchase value eligible for tax exemption each tax year.
Cycle to work scheme encourages employees to commute sustainably by offering tax incentives on bicycles and related equipment.
Essential bicycle and safety equipment covered by the scheme
The scheme applies to regular bikes, electrically assisted bicycles (e bike), and related safety equipment like helmets, bells, lights, mudguards, panniers, locks, and repair kits. Choosing appropriate safety gear and bike features, such as luggage carriers or cycle clips, enhances protection and usability. Bike shops familiar with the scheme can help select the preferred bike and accessories.
How salary sacrifice and tax breaks support tax free benefits
Salary sacrifice lowers gross salary by the bike’s value, resulting in immediate savings on income tax and PRSI. Employers also save on their contributions. Both employees and employers benefit from this tax free benefit, which supports sustainable travel. Self employed and civil servants may also qualify under certain conditions with written agreements.
The role of cycle shops and written agreements in the scheme
Cycle shops knowledgeable about the scheme help employees pick bikes and safety equipment suited for commuting. A written agreement formalizes the salary sacrifice, clarifying the bike’s intended own use and purchase limits. Proper documentation ensures smooth processing of tax relief and reimbursements, avoiding complications.
The cycle to work scheme in Ireland provides a valuable chance to save money on a new bicycle while promoting healthier commuting. Knowing how tax relief works and what equipment is covered helps employees and employers maximize benefits from this sustainable transport initiative.