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, levies or the Universal Social Charge on their repayments.
Usually your employer pays the supplier for the bicycle and sets up a ‘salary sacrifice’ arrangement from your salary over an agreed time frame (no more then 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.
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 only avail of the scheme once in a 4 year period. This amount will increase to €1,250 in respect of bicycles and €1,500 in respect of ‘e-bikes’ as part of the Government’s Jobs Stimulus Plan.
You must use the bicycle and safety equipment mainly for qualifying journeys. This means the whole or part (for example between home and train station) of a journey between your home and your normal place of work. Employers do not have to monitor this but you will be asked to sign a statement saying that the bicycle is for your own use and will be mainly used for qualifying journeys.
There is a limit of €1,250 in respect of bicycles and €1,500 in respect of ‘e-bikes’ as part of the Government’s Jobs Stimulus Plan. (this includes bicycles, safety equipment and delivery charges). If you spend more than this limit you are liable for a benefit-in-kind income tax charge.
Check if your employer will take part in the scheme. If they will, come to Garys Cycles Bike Shop and pick out your bike and anything else you want.
Voucher Payment Schemes
When it comes to Cycle to Work Scheme, some companies use what is called a voucher company or voucher scheme.
The schemes that we accept vouchers from are the following
If you have any questions please don’t hesitate to contact us.
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