Electric Bikes

On January 1st 2009 a new government scheme was launched to encourage people to cycle to work.

The new bike scheme covers the purchase of bicycles and accessories up to a maximum cost of €1,000.
The bicycle and/or accessories must be purchased by your employer but the scheme can then operate in 1 of 2 ways:

1) Your employer bears the full cost of the bicycle. Under the scheme, an employer may provide an employee with a bicycle and/or accessories without the employee being liable for benefit-in-kind taxation.

2)You pay for the bicycle by way of a salary sacrifice agreement (like the existing travel card scheme) over 12 months. Under such an arrangement, the employer provides the bicycle and/or accessories to the employee who agrees to fore-go or sacrifice part of his or her salary every pay period in order to cover the cost of the benefit. If you are on the top rate of tax and the full €1,000 is spent, you make a tax saving of €490.

********************* Either way you save on tax ************************

Here is an example of how the scheme would work should you decide to purchase the popular Kalkhoff Agattu:

RRP of the Agattu : €1,899

The maximum amount  covered by scheme   : €1,000
49% tax relief on €1,000 : €490 (49% = 41% PAYE + 4% PRSI + 4% Health Levy)

=> Cost of the Agattu to you is €1,899 less €490 which is €1,409
**This example is for the ‘salary sacrifice’ option.

Benefits for the Employee:

• Buy a new bicycle and accessories and save up to 49% on this purchase due to tax exemptions
• Improved and maintain your fitness levels
• By cycling you are helping create a cleaner and better environment for all. You contribute to lowering carbon emissions by leaving the car at home
• Cycling is the quickest way to get around most cities
• No problems with looking for car spaces, park right outside your work
• Lower commute costs

Benefits for the Employer:

• Employer’s PRSI is not payable on the cost of the bicycle and/or accessories
• A healthier and more productive workforce
• Helps create a good environmental image for your company
• Less car parking spaces required
• Cyclists are less likely to be late – cycling journey times are more predictable
• Support a greener environment, contribute to lowering carbon emissions

To find answers to more questions check out the official FAQ page