.

If you’re a contractor operating through an umbrella company or your own limited company, you can still benefit from the Bike to Work scheme, just like a regular employee. The scheme is designed to help people save money on commuting costs by purchasing a bike and equipment tax-free through their employer or their company.

What’s included

You can claim up to 52% on the following amounts tax-free, depending on the type of bike:

€1,250 for standard bikes.
€1,500 for e-bikes.
€3,000 for cargo and e-cargo bikes.

Eligible bicycles and equipment include:

– Pedal bikes and tricycles
– Pedelecs (e-bikes with a motor that cuts out above 25 km/h)
– Cargo and e-cargo bikes
– Safety gear like helmets (EN 1078), bells, lights, panniers, locks, tools, and more
– To qualify, the bike must primarily be used for commuting to and from work.
– Current tax-free limits (from 1 January 2023)

How often you can use the scheme

You can use the scheme once every four years. This applies regardless of how much you claim, and you cannot carry over any unused amount to a later purchase.

What savings are available under the scheme?

Using the Bike to Work Tax Scheme, you can purchase a bicycle or electric bicycle, and safety equipment, and obtain tax relief of up to 52% on the cost, subject to an upper value of the purchase price.

The upper limits on expenditure allowable for tax relief under the scheme are:

• €1,500 in respect of electric bicycles
• €1,250 in respect of other bicycles

(both of which increased from €1,000 in the “July Stimulus Package”).

On top of this, savings are made on Employers PRSI tax charges which are relevant to umbrella contractors set up under an Employee/PAYE (non-director) option. If the cost of your bike and equipment exceeds the relevant upper limits of €1,250 or €1,500, no tax relief is available on the balance above the limits.

Important conditions

– The bike must be new: Second-hand bikes aren’t eligible.
– It must be used mainly for commuting to and from work.
– Your company must buy the bike directly. You can’t purchase it personally and get reimbursed.
– You’ll need to sign a declaration confirming it’s for commuting use.

The scheme works through salary sacrifice, meaning the cost is deducted from your gross (pre-tax) salary over 12 months.

Want us to help you find out what applies to you?

If you need friendly, expert financial advice and support, contact us on hello@fenero.ie or 01-6877400.

.