2023 .The Cycle to Work Scheme is a tax incentive scheme which aims to encourage employees to cycle to and from work. Under the scheme employers can pay for bicycles and bicycle equipment for their employees and the employee pays back through a salary sacrifice arrangement of up to 12 months. The employee is not liable for tax, PRSI or the Universal Social Charge on their repayments.
Your employer does not have to take part in the scheme. However if they do, they must offer it to all their employees. Self-employed people are eligible for the scheme (if they are paying PRSI as an employee in addition to their self-employment).
How often can I use the scheme?
You can only avail of the scheme once in a Four-Year period. You can purchase equipment up to the €1,250 limit or €1,500 limit for an E-Bike (Electric Bicycle) or €3,000 on cargo and ecargo bikes
The tax year in which the bicycle or equipment is provided counts as the first year. So, if you used the scheme in 2019 you would be entitled to the relief again during 2023 (from January).
Note: A €100 Deposit is required when a Kilmallock Cycles Invoice is issued and this €100 deposit will be refunded when payment is made for bicycle and accessories are received.
Qualifying amount is as follows:
There is a limit of €1,250 on the amount that can be spent (this includes bicycles, safety equipment and delivery charges) or €1,500 for an E-Bike (Electric Bicycle) or €3,000 on cargo and ecargo bikes
What equipment does the scheme apply to?
The scheme applies to new bicycles and E-Bike (electrically assisted bicycles which require some effort from the cyclist). It does not cover motorbikes, scooters or mopeds or Ride On Lawnmowers..
Purchase of the following new safety equipment is also covered:
- Cycle helmets which conform to European standard EN 1078
- Bells and bulb horns
- Lights, including dynamo packs
- Mirrors and mudguards to ensure that the rider’s visibility is not impaired
- Cycle clips and dress guards
- Panniers, luggage carriers and straps to allow luggage to be safely carried
- Locks and chains to ensure cycle can be safely secured
- Pumps, puncture repair kits, cycle tool kits and tyre sealant to allow for minor repairs
- Reflective clothing along with white front reflectors and spoke reflectors,
- Basically everything in Kilmallock Cycles is available.
How do I pay for the bicycle?
Usually your employer pays the supplier for the bicycle and sets up a ‘salary sacrifice’ arrangement from your salary over an agreed time frame (which cannot be more than 12 months). This generally means that you visit the shop, select the equipment you wish to buy and have the shop invoice your employer directly for the cost. Note that the tax exemption does not apply if you pay for the bicycle and are reimbursed by your employer – they must pay for the bicycle.
The repayment for the bicycle and equipment is then deducted from your gross salary (this means before income tax, PRSI, pension levies or Universal Social Charge are deducted). These deductions can be made weekly, fortnightly or monthly depending on your salary payment arrangement. Your employer can also buy the bicycle on your behalf and not require you to pay for it.
You can find out more about the scheme on the Cycle to Work Scheme (revenue.ie)