Cycling has become one of the biggest growing trends in Ireland when it comes to commuting to and from work and also exercising.
It is a prime example of how well an incentive scheme can work, as the bike to work scheme has transformed cycling in Ireland.
As we all know, cycling is a great form of exercise and by cycling to work, you'll make sure you stay active and get good exercise every day without using up any more of your valuable time.
The bike to work initiative gives you the opportunity to sacrifice part of your salary in return for a bicycle and/or accessories. Under the scheme you don’t pay income tax, PRSI or Universal Social Charge of the price of the bicycle and/or accessories so you can save between 31% and 52% on the normal price (depending on your marginal tax rate).
Participating in the bike to work scheme couldn't be easier;
The employer simply pays for the bike and equipment up to the value of €1,000, and off you go. Your Employer will inform you how the payment will work exactly, whether they buy the bike outright or it operates under a "salary sacrifice" arrangement, but either way you save on tax! Simply set up an Allowable Deduction on Thesaurus Payroll Manager / Bright Pay to accommodate for the salary sacrifice.
The scheme is flexible in so far as your employer doesn't have to specifically notify the Revenue Commissioners that you're availing of the scheme and there are no Government forms to fill out. However, your employer does have to maintain the normal records such as invoices and payment details associated with buying the bike.
Introduced on 1st January 2009, this tax incentive scheme was designed to encourage more people to get on their bikes and cycle to work. And given the obvious rise of the number of cyclists on our roads, it’s easy to see that this incentive is definitely working.
You can find out more at http://www.revenue.ie/en/tax/it/leaflets/benefit-in-kind/faqs/cycle-work.html#cycle1