Cycle to Work Scheme – Information for Employers

Last updated: September 27th, 2023

With Spring hopefully on the horizon at last, now may be an ideal time for employers to support their employees to cycle to and from work by availing of the Government’s Cycle to Work Scheme.

Cycling is a great way to get regular exercise and the benefits of a healthy lifestyle can have a positive impact on employee productivity, attitude and efficiency – and can reduce stress.

Employers can avail of the government’s Cycle To Work initiative and make bicycles and equipment available to staff as a work-related benefit.

The Cycle To Work Scheme is a Government-led tax incentive initiative designed to encourage employees to cycle to and from work.

Under the Scheme, participating employees themselves purchase a bicycle and bicycle equipment up to a value of €1,000.00.

The shop where the items were purchased then invoice the employer for the items, rather than the employee. Alternatively, the employer can purchase the items themselves and provide them to participating employees.

The employer then recoups the cost of the items from the employee by way of a 12-month salary sacrifice arrangement.

Employers should take steps to ensure an agreement in respect of this arrangement is signed by the employee to authorise the deductions being made.

The recoupment payments are made as part of payroll, but the deductions occur before the application of tax and PRSI. Therefore, the employee does not have to pay any tax on the items – thus benefitting the employee.

The Scheme can only be invoked where the equipment is being used in the majority for qualifying journeys – i.e. – the equipment is used for all or part of the employee’s journey to and from work.

Each employee can avail of the Scheme once every 5 years.

If an employer opts to partake in the Cycle To Work Scheme, they must make the Scheme available to all employees and directors at the Company on an equal basis.

Employers can include a policy in their Employee Handbook to inform staff of the Scheme – and the parameters of it. Employers must keep accurate records in respect of the Scheme.

The incentive applies only in relation to the value of items not exceeding €1,000.00. Employees are liable for tax on the value of €1,000.00.

If you have any questions in relation to the cycle to work scheme or any other benefits please contact the advice line on +353 1 886 0350

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