Cycle to Work Scheme
In 2009 a new government scheme allowed for employees to cycle to work affording employees, several benefits:
- Keep fit
- Cost Effective
- Environmentally friendly
- €1000 bicycle and equipment allowance
Yes you read that right! Your employer is able to provide an allowance of €1000 for any employee who wants to cycle to work.
Employers can provide a new bicycle or pedelec (bicycle equipped with an auxiliary electric motor) and associated safety equipment to employees who agree to use the bicycles to travel to work. They will be treated as a tax-exempt benefit-in-kind.
This tax exemption may only apply once in every 5-year period in respect of any one employee/director and the cost must be incurred directly by the employer.
It is not permitted for the employee to purchase a bicycle and then seek reimbursement from the employer.
The scheme may also be implemented via salary sacrifice arrangements, whereby an employee agrees to forego part of his or her salary to cover the costs associated with the purchase of the bicycle and associated safety equipment.
Where such salary sacrifice arrangements are implemented they must be completed over a maximum period of 12 months.
In such circumstances, the employee will not be liable to tax or PRSI or levies on the salary sacrificed. The maximum amount of salary that can be sacrificed is €1,000.