Cycle to Work Scheme FAQs

 

What is a salary sacrifice arrangement and how do I make my savings?

A salary sacrifice happens when an employee gives up the right to receive part of the pay due to them under their contract of employment in return for the employer's agreement to provide some form of non-cash benefit, in this case the purchase of a bicycle and related equipment. You will make salary sacrifice payments from your gross rather than net salary.

 

What is the payback period?

This will be up to 12 months depending on the options that your employer provides. 

 

What happens if I leave my job before I've finished paying for my bike?

Under the terms of the purchase agreement the order is non-cancellable. This means that you will need to settle all outstanding monies before you leave. The outstanding balances will be deducted from your final gross salary payment.

 

How will salary sacrifice affect my pension?

Your pension contributions are payable on your full salary. Consequently, your pension and related benefits are not affected by the sacrifice.

 

What happens if I go on unpaid leave?

You will have to check with your employer. The remaining deductions may be made before you go on leave or postponed until your return, depending on your Company policy and the nature of the leave.

 

What happens if I am made redundant or my contract is terminated?

Any remaining deductions will be taken from your final salary payment.

 

Can I purchase a bike from one retailer and equipment from another?

Revenue stipulates that the purchase of the bicycle and safety equipment must be processed in one transaction only.

 

I want to join the scheme / what next?

Visit your local bike retailer and follow the steps set out above to order your voucher.

 

FAQ for Bikes

What is the Cycle to Work scheme?

The Cycle to Work initiative gives you the opportunity to sacrifice part of your salary in return for one bicycle and/or allowable safety equipment, which should be used primarily for part or all journeys to/from work. Under the scheme you don't pay Income Tax, PRSI or Universal Social Charge on the price of the bicycle and/or safety equipment up to the value of €1,250 for regular bikes, €1,500 for Electric Bikes and €3,000 for a cargo or electric cargo bike; To take part in the Cycle to Work scheme employees will need to agree to reduce (sacrifice) an agreed amount of their salary for a set amount of time, which can be no longer than 12 months.

 

What is covered under the Cycle to Work Scheme? Can I get a Scooter or e-moped?

The Revenue rules for the Cycle to Work Scheme say you can get new bicycles and pedelecs (electrically assisted bicycles which require some effort from the cyclist). https://www.revenue.ie/en/jobs-and-pensions/taxation-of-employer-benefits/cycle-to-work-scheme.aspx. The electric bike must 

• has a motor power of less than 250 W
• have a speed less than 25 kph, with the motor cutting out after that speed is reached.
• bikes can't have a throttle and must be pedal assist.

 

Electric Bikes under the Cycle to Work Scheme must meet these criteria. This may limit the suppliers that we can partner with for the Cycle to Work Scheme.

 

The Cycle to Work Scheme does not cover: motorbikes, scooters or e-mopeds; second-hand bicycles or equipment; bicycle parts or associated equipment. Although certified models for these vehicle types may be legal to use in Ireland, that does not mean that they are eligible for tax relief under the Cycle to Work Scheme. Note that Revenue may consider it tax evasion to get tax relief on a bike that is not eligible. Note also that the Gardai are planning to introduce roadside checks to check the power and speed of electric bikes: https://www.irishtimes.com/crime-law/2024/02/27/new-roadside-garda-checks-to-be-introduced-for-e-bikes-and-e-scooters/

 

What is the purpose of the Cycle To Work scheme?

The purpose of the scheme is to encourage more employees to cycle to and from work, or between work places, thereby contributing to lowering carbon emissions, reducing traffic congestion and improving health and fitness levels.

 

Is there any limit on the price of the bike I can obtain?

Yes, there is a limit on the price of the bike, you will only be able to claim tax relief up to a maximum of €1,250 for regular bikes, €1,500 for Electric Bikes and €3,000 for cargo or electric cargo bikes. For more expensive orders you can pay the balance in cash directly to the shop. There is no minimum amount but please note that you are only allowed one application every four years regardless of the amount used.

 

What happens if the bike gets stolen before I've paid for it?

It will still be down to you (employee) to complete the full payment even if you no longer possess the bike, which means if the bike is stolen the employee will be liable for any outstanding monies. It is very important to insure the bike, and any goods fitted to the bike, to safeguard against the losses following theft. HubEx offers discounts on bike insurance at www.biketowork.ie/insurance . You can obtain safety equipment from HubEx partnering shops, where you can ask for approved Secure D-locks and cable locks to conform to insurance companies requirements.

 

What cycle-related equipment is tax-allowable under the scheme? 

You can get a new bicycle, but not bicycle parts. The following accessories are covered: Bells, clips, dress guards, helmets, horns, lights, locks, mirrors, mud guards, panniers and straps, are all included, as are pumps, puncture repair kits, cycle tools, reflectors and reflective clothing. While rain gear isn't covered outright, clothing that is both waterproof and reflective is.

 

How do I go about getting a tax-free bike through HubEx?

The scheme is a voucher scheme and you will need to apply for a voucher to redeem against your goods when you go to collect them from a local participating bicycle shop. To obtain your voucher you need to:

• Access your company HubEx online microsite where you print off a quote form.
• Visit your local participating bicycle shop to choose your bike and equipment.
• Having got the quote from the shop, return to the website and enter the details.
• Once the quotation is approved by your HR department HubEx will invoice your employer.
• Once payment is made for the bike package by your company a secure voucher will be emailed to you.
• Redeem your voucher at the bike shop and collect your goods (you must provide your Company photo ID card or current Drivers license or Passport to do this).

 

Who purchases the bicycle and/or safety equipment?

The employer must purchase the bicycle and/or safety equipment for you so that you can make your Income Tax,PRSI and USC savings via Salary Sacrifice. The exemption will not apply where an employee purchases a bicycle and/or safety equipment and gets reimbursed by his or her employer.

 

How many times a week do I have to use the bike for work?

There is no requirement for you to cycle to work for a specified number of days throughout the year and there is no special requirement for you to record your trips. The scheme does require that the bike is mainly used by you to travel to work. You can also use the bike for leisure at weekends and on holiday.

 

Can home-based employees avail of the scheme?

Yes. If the bicycle is used for work related journeys, for example trips to the post office or to collect office supplies.

 

Do I have to keep a record of my commuting mileage?

Revenue does not expect employees to keep a record of mileage.

 

Is it my responsibility to insure my bike?

Yes, even if you are still paying for your bike through salary sacrifice. HubEx offers discounts on bike insurance through www.travelhub.ie/insurance

 

Can I get a bike from HubEx mail order?

HubEx partner shops are capable of supplying bike packages mail order from their shops, under the Government's green travel plan. However, there are distinct advantages when buying from your local bike shop that will be the first port of call for advice, servicing, after sales and warranty.

 

Do I need to maintain the bike myself?

You are responsible for maintaining the bike for your own use. Your local shop will be able to advise you about necessary servicing depending on how you use your bike. They are also likely to give your bike a first free service once you have bedded it in.

 

What happens if I do not spend the full value that I apply for?

The Salary Sacrifice deductions are calculated using the amount you apply for and which are specified on your Salary Sacrifice Agreement. If you do not fully utilise the amount, your salary will still be reduced by the amount that you applied for and which you agree to and when signing your Salary Sacrifice Agreement. If there is a shortfall, you can obtain relevant safety equipment to make up the difference. The shop cannot give you any change or store credit as this is against the Revenue rules for the scheme.

FAQ for Employers

Who is entitled to use HubEx?

Under the initiative, salaried employees who are employed and paying PAYE tax in Ireland.

 

How does it work?

The employee chooses a bicycle and any associated safety equipment and the employer would purchase same on behalf of the employee. The employer will then recover the cost of the bike from the employee using Salary Sacrifice deductions from their gross pre-tax pay.

 

How will it be enforced?

It is not envisaged that there will be a notification process involved, but the purchase of bicycles and associated safety equipment by employers for employees will be subject to the normal Revenue audit procedure with the normal obligations on employers to maintain records.

 

What accessories and equipment is included under the tax exemption?

Bells, clips, dress guards, helmets, horns, lights, locks, mirrors, mud guards, panniers and straps, are all included, as are pumps, puncture repair kits, cycle tools, reflectors and reflective clothing. While raingear isn't covered outright, clothing that is both waterproof and reflective is covered.

 

Who are HubEx?

• Bike to Work Ltd t/a HubEx is an independent company created to help both employers and employees to use the Cycle to Work Scheme.
• HubEx use our industry experience and trade contacts to get you riding to work on a bike of your choice from your local preferred participating bicycle shop.

 

Who is entitled to use HubEx?

Under the initiative, salaried employees who are employed and paying PAYE Tax in Ireland.

 

Why use HubEx?

• HubEx customers are not limited to any particular bike or accessory brands and therefore can choose the best for quality and value-for-money. This results in the optimum package of bike, accessories, and safety equipment.
• HubEx provide a single point of contact for employers and employees wishing to take up the scheme.
• HubEx will assist you in setting up and running a successful Cycle to Work scheme at no cost to the employer. We can help you to get a scheme going in no time, offering great customer service and access to all the leading bike brands. The result? Better scheme uptake, and a host of organisational and individual gains.
• HubEx is also fully supported nationwide and liaise with independent bike dealers providing up-to-date literature and point-of-sale material.

 

What support will HubEx offer to you when the scheme is running?

• HubEx will offer full support for handling your queries, and advice on choice of bike and safety equipment.
• HubEx partners (the cycle shops in your area who are partnering with HubEx will be your local port of call for test riding etc.
• Once the bike package is purchased these local bike shops will also handle servicing and any warranty issues.