The Cycle to Work Scheme (also known as the Bike to Work Scheme), you can get a new bike tax-free through your work. Your employer pays for a new bike, and then you repay the cost of regular instalments from your gross (overall) salary.

You do not have to pay tax, PRSI, or the Universal Social Charge on your repayments.

Not every employer takes part in the scheme. However, if they do, they must offer it to all their employees.

If you are self-employed, you cannot take part in the Cycle to Work Scheme unless you pay PRSI as an employee in addition to your self-employed 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.

There are 3 limits depending on the type of bike you bought. The limit (including related safety equipment) is:

• €3,000 for cargo and e-cargo bikes.
• €1,500 for pedelecs and e-bikes.
• €1,250 for other bicycles.

From 1 August 2020 to 31 December 2022, the limit for cargo and e-cargo bikes was €1,250 and €1,500, respectively.

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 2020, regardless of the month, you could buy a new bike and avail of the next tax relief in January 2024.

Note: A cargo bicycle is a bicycle with a special purpose frame that has been designed to carry heavy loads or passengers other than the rider. A container or a platform may be integrated into, or attached to, this frame in front of, or behind, the rider. An e-cargo bicycle is a cargo bicycle with a pedelec configuration. A bicycle cannot be converted into a cargo bicycle by simply attaching a container or a trailer. The frame must be specially designed to carry large or heavy loads or passengers.

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

• New bikes and pedelecs (electrically assisted bikes that require some effort to propel)
• Cycle helmets
• Bells and bulb horns
• Lights (including dynamo packs)
• Mirrors
• Mudguards and skirt guards
• Cycle clips
• Panniers, luggage carriers and straps
• Locks and chains
• Pumps
• Puncture repair kits, cycle tool kits and tyre sealant
• Reflective clothing
• Bike reflectors
• Child seats, helmets, and trailers are not included.

Note: The scheme does not include motorbikes, mopeds, scooters, or second-hand bicycles or equipment or bicycle parts or associated equipment.

You should ask your employer if they run the scheme and check their requirements. They may allow you to select the bicycle and equipment from any shop or only certain bicycles from specific shops. If you are a civil servant or public servant, you can choose your bike by visiting a bike shop and selecting the bike and equipment that you want to buy. Next, tell 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-upon 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.

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

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 pedelecs or an e-bike, or €3,000 for a cargo or e-cargo bike.