Cycle To Work Scheme Ireland

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How the scheme works

The basics of how the cycle to work scheme
works in the Republic of Ireland Revision “A”

It’s this simple:

The employer gives the employee a (up to) €1000 loan tax free for the purpose of buying a bicycle out of the employees own salary, what this means is your employer can pay a tax compliant bicycle shop €1000 of your wages before its taxed by the government & that’s how you the employee saves on tax:

So an example:


Mary earns €40,000 per year which is subject to tax as we all know only too well by the government.

Next year Mary will earn €40,000 but €1000 of it will be given to a bicycle shop before deductions only leaving €39,000 for the government to tax, i.e. giving the employee tax relief on €1000 before the government get their hands on it.

Basically you are not going to let the government take any Income tax (41%) USC (5.3%) or PRSI (4%) from that €1000 that’s how you save, i.e. 50.3% (percentages will vary depending on earnings)
No need to claim it, inform Revenue or fill out any forms. The employer will simply take equal monthly payments to repay the €1000 advanced tax free sum from your own wages, however the government won’t see a cent of that €1000 to make deductions, it couldn’t be simpler.

So Mary still earns €40,000 as last year but only €39,000 is seen by the government as the other €1000 has been taken out of the equation for that particular year & given to a bicycle shop. This can be done once in every 5 years under the scheme. **See for government scheme rules**

I hope this makes the scheme basics understandable in a few sentences, we receive dozens of calls a week from people who are confused, but don’t be.


Make sure the bicycle shop is tax compliant (has a tax clearance certificate) & keep the invoice in your normal way for the bike purchased to prove it was bought under the scheme rules.


You can buy a bicycle any where you like under the Government’s scheme rules (section 9.6)
if your employer will advance the shop €1000 of your salary as they are legally entitled to do, you do not have to go through a pre-approved list or website or voucher company to participate in the scheme although these options are available if you wish to use them, however holds the only commission free list of CTW bike outlets in Ireland for your use.

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