Cycle to Work Scheme

Under 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 ecargo bikes.
• €1,500 for pedelecs and e-bikes.
• €1,250 for other bikes.

From 1 August 2020 to 31 December 2022 the limit for cargo bikes was €1,250 and the limit for ecargo bikes was €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 anytime in 2020, you can buy a new bike and receive the next tax relief in January 2024.

A cargo bike has a special purpose frame to carry heavy loads or other passengers. A container or a platform may be integrated into, or attached to, this frame in front of, or behind, the rider.

An ecargo bike is a cargo bike with a pedelec configuration. A bike cannot be converted into a cargo bike by simply attaching a container or a trailer. The frame must be specially designed to carry large or heavy loads or passengers.

That is acceptable. Under the scheme, you will not be taxed for benefit in kind if you receive a bike from your employer if the cost of the bike and equipment is not over the limit for the bike.

The scheme covers new bikes and equipment (not second-hand). This includes:

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

What is not included?

Child seats, helmets and trailers are not included.

The scheme does not include motorbikes, mopeds, scooters, second-hand bikes, equipment, bike parts or associated equipment.

Step 1: Check with the employer

Ask your employer if they run the scheme and check their requirements. They may allow you to select the bike and equipment from any shop or only certain bikes from specific shops.

If you are a civil or public servant, the cycle shop must be on the suppliers' list (pdf).

Step 2: Choose your bike with the supplier

You can choose your bike by visiting a bike shop and selecting the bike and equipment that you want to buy.

Step 3: Inform your employer of your choice and they pay for the bike directly

Tell your employer of this choice. The employer will then pay the bike shop or supplier for the bike and equipment directly.

Step 4: Sign an agreement with your employer

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

Step 5: You repay your employer in instalments

Your employer then sets up salary deductions over an agreed period of up to 12 months to recover the costs.

Depending on your salary arrangements, these deductions can be made weekly, fortnightly or monthly.

Do not pay for the bike directly

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

Step 1: Decide to take part in the scheme

As an employer, you can decide whether to take part in the scheme, as taking part is voluntary. If you do, the scheme must be made available to all employees.

Step 2: Pay the supplier

The employer must pay the supplier directly, once an employee chooses a bike and accessories. If the employee has already paid, the employer cannot refund them.

Step 3: Set up salary deductions

After buying the bike, the employer recovers the cost by deducting instalments from the employee’s gross salary. These deductions can be spread over up to 12 months. They can be made weekly, fortnightly, or monthly, depending on how the employee is paid.

Step 4: Ensure tax compliance

The employer makes tax savings possible for the employee by making deductions before tax, PRSI, and USC are applied.

Step 5: Get a written agreement

The employer must make sure that the employee signs a written agreement confirming that the bike will be used primarily for commuting to and from work.

Note: If an employer provides the bike for free, and the cost stays within the scheme's limits, the employee will not be taxed on the benefit in kind.