The Bike-2-Work scheme is a government initiative designed to encourage people to cycle to work, by offering tax incentives on the purchase of bicycles and cycling equipment. It is a win-win situation for both employees and employers, as it promotes a healthy lifestyle while reducing carbon emissions.
How does the scheme work?
Under the scheme, employers can purchase bicycles and cycling equipment up to the value of €3,000 for their employees. The employee then pays for the bicycle through salary sacrifice, meaning they can spread the cost of the bicycle over a 12-month period, effectively making the purchase tax-free.
How much can I spend on the Bike to Work Scheme, and how often can I use it?
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 bicycles.
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 2023, regardless of the month, you could buy a new bike and avail of the next tax relief in January 2027.
What equipment does the Bike to Work Scheme cover?
The scheme covers the following items, which must be purchased 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 tire sealant
- Reflective clothing
- Bike reflectors
The scheme does not include motorbikes, mopeds, scooters or second-hand bicycles or equipment or bicycle parts or associated equipment.
Benefits of the scheme
The Bike-2-Work scheme is a great way to save money on the purchase of a new bicycle, as it is effectively tax-free. This means that you can save up to 52% on the cost of a new bike, depending on your income tax bracket.
The scheme also provides significant health benefits. Cycling to work is an excellent form of exercise, and it can help to reduce stress, improve fitness levels and boost your overall wellbeing. Regular cycling can also help to reduce the risk of developing health conditions such as heart disease, diabetes, and obesity.
Additionally, cycling to work is an eco-friendly and sustainable mode of transport that can help to reduce your carbon footprint. By reducing your reliance on fossil fuels, you can help to protect the environment and reduce air pollution.
How to apply for the scheme
To avail of the Bike-2-Work scheme, you must be employed and pay tax in Ireland. Your employer must also be registered with Revenue as an employer and be able to provide you with a salary sacrifice arrangement.
To apply for the scheme, you must first select a bike from an approved bike retailer. You can then apply to your employer to purchase the bike on your behalf. Your employer will purchase the bike and cycling equipment and deduct the cost from your gross salary over a 12-month period.
Conclusion
The Bike-2-Work scheme is a great initiative that promotes cycling as a sustainable, healthy, and cost-effective way of commuting to work. By taking advantage of this scheme, you can save money on the purchase of a new bike, improve your health, and help to protect the environment.
