The Bike to Work Scheme in Ireland: A Complete Guide

The Government of Ireland has introduced the Bike to Work Scheme to encourage employees to cycle to work. This initiative promotes health and reduces the use of public transport. This article provides comprehensive details about the scheme.

Overview

The Bike to Work Scheme is a taxation initiative that allows employees to purchase bicycles through their employers, with the cost deducted from their gross salary. This scheme promotes cycling, benefiting health and the environment by reducing fuel consumption and CO2 emissions.

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Under this scheme, employees can save money by purchasing a bike before tax is applied. Deductions include USC and PRSI. Employees need to check if their employers participate in the scheme and can support them in buying a bicycle. Employers who join the scheme should assist each employee in the office.

How It Works

Self-employed individuals can also participate but must handle both employer and employee contributions themselves. They must provide a written statement confirming the bike is for personal use and related to professional commuting.

The scheme operates through salary sacrifice, where the bike’s cost is deducted from monthly paychecks. It covers essential cycling equipment needed for safety and compliance with traffic regulations. The covered items include:

• New bikes
• Cycle helmets
• Bells and bulb horns
• Lights and mirrors
• Cycle clips
• Locks and chains
• Mudguards and skirts
• Puncture repair kits and cycle repair tools
• Bike reflectors

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Note that child seats, trailers, motorcycles, and second-hand scooters are not included in this scheme.

Eligibility

Certain eligibility criteria must be met to benefit from the scheme:

• Age: Candidates must be over 18 years old.
• Residency: Permanent residency in Ireland is required, with proof such as utility bills.
• Immigrants: Must provide residency proof and country documents.
• Living History: A minimum of 10 years living in the country.
• Tax Compliance: All previous year’s tax returns must be filed.
• Pending Tax Returns: No pending tax returns on the disbursement date.
• Disability: Disabled applicants must provide medical documentation.
• Employment Proof: Employment proof, salary slips, and related documents are required.
• Bank Account: Details of the primary bank account for direct deposit.
• Couples: Must provide proof of marriage.
• Other Benefits: Documents related to any other state or central benefits.

Scheme Amount

The amount provided under the scheme depends on the type of bicycle purchased. Here are the key points:

• The scheme can be used once every four years.
• The four-year tax break is calculated as tax years. For example, if the scheme is used in 2020, reapplication is possible in 2024.
• The period from 2020 to 2024 is for repaying the previously purchased bike’s amount.

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The scheme aims to make cycling a more accessible and appealing option for commuting, offering financial incentives to both employees and employers. By promoting cycling, the scheme contributes to a healthier lifestyle and a greener environment.

Benefits of the Bike to Work Scheme

The Bike to Work Scheme in Ireland is a fantastic initiative to encourage cycling, offering significant financial and environmental benefits. Employees save on taxes, enjoy a healthier commute, and reduce their carbon footprint. Employers participating in the scheme can support their employees’ well-being and contribute to a sustainable future.