The Cycle to Work Scheme (Bike to Work) is a government scheme designed to give employers the opportunity to offer their employees up to 52% savings when purchasing an e-bike, once every four years for the purposes of primarily commuting to work. Under the scheme an employer can pay for a new e-bike (including accessories) and the employee then repays the cost in regular instalments from their gross salary.
You are not liable for tax, PRSI or the Universal Social Charge on your repayments. If you are self-employed, you are not entitled to avail of the Cycle to Work Scheme unless you pay PRSI as an employee in addition to your self-employed work. 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.
The amount you save will depend on the rate of Income Tax you pay. The employer is invoiced directly for the e-bike and buys the bike on your behalf, then deducts the reduced payment amount from your payslip. e.g. On purchasing an e-bike for €1200, you will save €594 off this price if on the 40% tax rate. So you have €606 deducted from your take home pay by your employer to pay for the e-bike.
If on the 20% tax rate, you save €353 and have €846 deducted from you take home pay by your employer to pay for the e-bike. Your employer may take this deduction from your payslip, in a lump sum, over a few months, or over a 12-month period.