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AI Overview: Ireland’s Cycle to Work scheme lets employees buy bikes and safety equipment through salary sacrifice, saving 31-52% on costs by avoiding tax, PRSI, and USC deductions.
What Is the Cycle to Work Scheme?
The Cycle to Work scheme in Ireland is a government initiative that helps you buy a bike without paying full price. Here’s the deal—your employer buys the bike, and you pay them back through your salary. But here’s where it gets good: those repayments come out before tax is calculated.
That means you don’t pay income tax, PRSI, or Universal Social Charge on the money used to buy your bike. It’s completely legal, and it can save you hundreds of euros.
The scheme started back in 2008 under the Finance Act. The government wanted more people cycling to work—less traffic, healthier workers, better for the environment. In 2020, they bumped up the spending limits to make it even better. Now you can get pricier bikes, including e-bikes and cargo bikes.
Your employer doesn’t have to offer this scheme, but if they do, they must make it available to everyone who works there. You can’t pick and choose who gets to participate.
How Much You’ll Actually Save
This is where things get interesting. Your savings depend on your tax rate—the more you earn, the more you save.
Here’s the breakdown:
- Higher rate taxpayers (40% tax): Save around 52%
- Standard rate taxpayers (20% tax): Save around 31%
Let’s say you want a bike that costs €1,000. If you’re on the higher tax rate, you’ll only pay about €480 out of your net salary. That’s a €520 saving. Not bad, right?
The savings come from three places:
- No income tax on the repayments
- No PRSI (Pay Related Social Insurance)
- No USC (Universal Social Charge)
Your employer benefits too—they save on employer PRSI contributions. That’s why some companies are happy to set up the scheme even though there’s a bit of admin work involved.
Real example: A €1,500 e-bike normally costs you €1,500 from your take-home pay. Through the scheme, it might only cost €720-€1,035 depending on your tax rate. You’re essentially getting a €465-€780 discount.
Spending Limits and What’s Covered
The government sets clear limits on how much you can spend. These limits went up in 2020, which was great news for anyone wanting an e-bike or cargo bike.
Here are the current limits:
- Regular bikes: €1,250
- E-bikes and pedelecs: €1,500
- Cargo bikes and e-cargo bikes: €3,000
These amounts include everything—not just the bike itself. You can also get safety equipment with that money:
- Helmets
- Lights (front and rear)
- Bells
- Locks
- Reflective gear
- Bike bags and panniers
The key word is “safety equipment.” You can’t use the scheme to buy regular cycling clothes or shoes, but you can get high-visibility jackets and other safety gear.
One important thing—these are maximum limits. You can spend less if you want. A €600 bike works just fine under the scheme. You don’t have to max out your allowance.
Who Can Use the Scheme
Not everyone can take advantage of this deal. There are some requirements you need to meet.
You qualify if:
- You’re an employee paying PRSI
- Your employer participates in the scheme
- You plan to use the bike mainly for commuting to work
You don’t qualify if:
- You’re fully self-employed
- You’re a company director not paying employee PRSI
- You work mainly from home (though some employers are flexible on this)
Your employer chooses whether to offer the scheme. Big companies and public sector organizations usually do. Smaller businesses might not—it depends on their HR setup and whether they want to handle the paperwork.
If you’re a civil servant or work for the HSE, you’re in luck. Most government departments and health service organizations participate. They’ve made it pretty straightforward for public sector workers.
Here’s something important—you can only use the scheme once every four years. The clock starts from the tax year you got your last bike. So if you got a bike in 2024, you can’t get another one until 2028.
How to Apply: Step-by-Step Process
Getting your bike through the scheme isn’t complicated, but there’s a process to follow. Here’s exactly what you need to do.
Step 1: Check if your employer offers it
Ask your HR department or payroll team. If they don’t offer it, you could always ask them to consider it—especially if several employees are interested.
Step 2: Pick your bike and get a quote
Visit participating bike shops (more on those in the next section). Choose your bike and safety equipment. Get a written quote or invoice from the shop. Make sure the total doesn’t exceed your category limit.
Step 3: Submit your application
Fill out whatever form your employer uses. Some companies have online systems, others use paper forms. Attach your quote from the bike shop.
Step 4: Sign the agreement
You’ll sign a written agreement confirming you’ll use the bike primarily for commuting to work. “Primarily” doesn’t mean exclusively—you can still use it on weekends. But work commuting should be the main reason you’re buying it.
Step 5: Your employer pays the shop
Once everything’s approved, your employer pays the bike shop directly. You don’t pay upfront and get reimbursed—your employer handles the payment.
Step 6: Salary deductions begin
The repayments come out of your gross salary over up to 12 months. Your employer decides the repayment period, but 12 months is most common. Remember—these deductions happen before tax, which is where your savings come from.
Step 7: Get your bike
The bike is yours from day one. You own it immediately—it’s not a loan situation. You can pick it up from the shop or have it delivered.
The whole process usually takes 1-3 weeks from application to getting your bike, depending on how quickly your employer processes things and whether the bike shop has your chosen model in stock.
Where to Buy Your Bike
You can’t just walk into any bike shop and use the scheme. The shop needs to participate in the program.
The good news? Over 300 retailers across Ireland are signed up. You’ll find participating shops in pretty much every town.
Major scheme providers include:
- Cyclescheme Ireland—one of the biggest providers, working with hundreds of bike shops
- Bike to Work Ireland (run by HubEx)—another large network
- Individual shops that run their own schemes
Popular participating retailers include Cycle Superstore, 360 Cycles, and Eurocycles Dublin, but there are many more local shops involved too. Shops from Kerry to Kilkenny, Cork to Dublin—there’s good coverage nationwide.
How to find participating shops:
Check your scheme provider’s website. If your employer uses Cyclescheme, go to their site and search for shops by location. Most providers have an online search tool.
You can also call local bike shops and ask if they accept Cycle to Work scheme vouchers. Most decent-sized shops do.
What about online purchases?
Some scheme providers let you buy bikes online, but you’ll usually need to collect from a physical store or arrange delivery. Check with your specific scheme provider about their online purchasing rules.
When you’re at the shop, tell them upfront you’re using the Cycle to Work scheme. They’ll know what paperwork to prepare. Get a detailed quote showing the bike model, safety equipment, and total price.
Important Rules and Restrictions
The scheme has some rules you need to follow. Breaking them could cause tax problems, so pay attention.
The four-year rule
You can only participate once every four years. This is calculated from the tax year—not the exact date—when you got your previous bike. If you got a bike in June 2023, you can apply again from January 2027.
Primary use must be commuting
The agreement you sign says you’ll use the bike mainly for getting to work. You can use it for other things—weekend rides, errands, whatever. But commuting should be the main purpose.
Some people worry about this if they work from home. Rules vary by employer. Some are strict, others more flexible if you occasionally go to the office. Check with your HR department.
Ownership from day one
The bike belongs to you immediately. There’s no waiting period. Some people think the employer owns it until repayments finish, but that’s not how it works.
New bikes only
You can’t use the scheme to buy second-hand bikes. It has to be a new purchase from a registered supplier.
Keep records
Your employer needs to keep records of the scheme for tax purposes. You don’t need to do much, but keep your agreement and any paperwork in case Revenue ever asks questions.
What if you leave your job?
If you leave before finishing repayments, you’ll need to sort things out with your employer. Usually, you’ll either:
- Pay the remaining balance from your final salary
- Make arrangements to continue payments
- The outstanding amount might be treated as a benefit in kind (meaning tax is due)
Check your company’s policy on this before you leave.
Can’t double-dip
You can’t use the scheme if you’re already getting a company car or other transport benefits that would conflict with it. However, you can combine it with TaxSaver tickets for public transport.
Common Questions About the Scheme
Can you buy accessories separately?
Only safety equipment counts under the scheme—helmets, locks, lights. Regular accessories like water bottles, phone mounts, or cycling jerseys don’t qualify. But most shops will sell you those separately at the same time.
What if your employer doesn’t offer it?
You can ask them to set it up. Show them the benefits—there’s no cost to them, and they actually save on employer PRSI. Some scheme providers offer free setup and administration. If they still won’t, you’re out of luck—there’s no way to participate without employer involvement.
Can you use it with other transport schemes?
Yes, you can use the Cycle to Work scheme and still buy a TaxSaver ticket for buses or trains. They’re separate benefits. This works well if you cycle most days but take public transport in bad weather.
What about insurance and maintenance?
The scheme doesn’t include insurance or future maintenance. You’ll need to arrange bike insurance separately if you want it. Keep some money aside for regular servicing—chains need replacing, brakes need adjusting, tires wear out.
What if the bike gets stolen?
You’re still responsible for the repayments even if your bike is stolen. This is why many people get bike insurance. Register your bike’s frame number and take photos—it helps with insurance claims and police reports.
Can you return or exchange the bike?
That depends on the shop’s return policy. The scheme itself doesn’t prevent returns, but once your employer has paid the shop, exchanges can get complicated. Best to be very sure about your bike choice before completing the purchase.
Do you need to register the bike?
There’s no legal requirement to register bikes in Ireland, but many people do it anyway. BikeRegister.com is popular for this—it helps recover stolen bikes. Some insurance companies require registration.
Ready to Get Your Tax-Free Bike?
The Cycle to Work scheme in Ireland offers genuine savings—up to 52% off a new bike isn’t something to ignore. Whether you’re eyeing a regular commuter bike, an e-bike for longer journeys, or a cargo bike for family adventures, the scheme makes cycling more affordable.
The process is straightforward: check with your employer, pick your bike, sign the paperwork, and start saving money on your commute. With limits up to €3,000 for cargo bikes and a network of 300+ participating retailers, there’s plenty of choice available.
Don’t wait too long—you can only use the scheme once every four years. If you’ve been thinking about cycling to work, now’s the time to make it happen.
Ready to learn more about saving money and living better? Check out more helpful guides at https://viltnemnda.co.uk/ for ways to keep more cash in your pocket.