IF you are planning to embrace a fitter lifestyle in 2026, you may wish to consider parking the car and cycling to work instead. Under the Cycle to Work Scheme (also known as the Bike to Work Scheme), you can get a new bike tax free through your work. Your employer pays for a new bike and then you repay the cost of regular instalments from your gross (overall) salary. You do not have to pay tax, PRSI or the Universal Social Charge on your repayments. Not every employer takes part in the scheme. However, if they do, they must offer it to all their employees. If you are self-employed, you cannot take part in the Cycle to Work Scheme unless you pay PRSI as an employee in addition to your self-employed work.

How do I buy a bike under the Cycle to Work Scheme?

You should ask your employer if they run the scheme and check their requirements. They may allow you to select the bicycle and equipment from any shop or only certain bicycles from specific shops.

You can choose your bike by visiting a bike shop and selecting the bike and equipment that you want to buy. Next, tell your employer of this choice. The employer will then pay the bike shop or supplier for the bike and equipment directly. It’s important to note that your employer cannot reimburse you if you make the payment. The tax exemption does not apply if you pay for the bicycle and your employer reimburses you. You must sign a written agreement stating that the bike is for your own use, and you will use it for what the Revenue Commissioners consider qualifying journeys: getting to and from work. Your employer then sets up salary deductions over an agreed time frame of up to 12 months to recoup the costs. These deductions can be made weekly, fortnightly or monthly depending on your salary arrangements.

How do I save money on the Cycle to Work Scheme?

As an employee you save on the costs of cycling to work because your repayments come out of your salary before tax, USC and PRSI are deducted. This means that someone on the highest rate of tax will save almost half of the cost of a new bike and equipment.

How much can I spend on the Cycle to Work Scheme, and how often can I use it?

Currently, there are three limits depending on the type of bike you bought. The limit (including related safety equipment) is €3,000 for cargo and e-cargo bikes, €1,500 for pedelecs and e-bikes, and €1,250 for other bicycles. How frequently can I avail of the scheme? As an employee, you can use the scheme once every four years. The four-year span between tax breaks is counted by tax year. If you bought a bike anytime in 2022, you can buy a new bike and receive the next tax relief in January 2026.

What equipment does the Cycle to Work Scheme cover?

The scheme covers the following items, which must be bought 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 tyre sealant; reflective clothing; and bike reflectors. The scheme does not include motorbikes, mopeds, scooters or second-hand bicycles or equipment or bicycle parts or associated equipment. Child seats, helmets and trailers are also not included.

What if my employer buys me a bike and doesn’t charge me for it?

That is acceptable and under the scheme, you will not be taxed for benefit in kind if you receive a bike from your employer as long as the cost of the bike and equipment does not exceed a total of €1,250, or €1,500 for pedelecs or an e-bike or €3,000 for a cargo or ecargo bike.

For further information call a member of the local Citizens Information Service in West Cork on 0818 07 8390.
They will be happy to assist you and if necessary arrange an appointment for you.
The offices are staffed from 10am-5pm from Monday to Thursday and on Friday from 10am-4pm.

Alternatively you can email [email protected] or log on to www.citizensinformation.ie