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Go to the shopThe Cycle to Work Scheme is an innovative initiative designed to promote cycling as a sustainable and healthy mode of transportation for employees commuting to work.
By allowing employees to save significantly on the cost of a new bike and related safety equipment, this scheme not only encourages environmentally friendly commuting but also contributes to a healthier workforce.
We are happy to announce that Pedro Pedals is verified and you can come, pick your bike while saving big!
In this article, we will explore the ins and outs of the Cycle to Work Scheme, including how it operates, the types of bikes available, potential savings, qualifying journeys, and the application process, so you can get your bike asap.
The Cycle to Work Scheme is a tax incentive program that allows employees to purchase a new bike, safety equipment, and accessories through their employer.
The scheme aims to encourage cycling as a viable and eco-friendly commuting option in Ireland.Β
By participating in the scheme, employees can save on the total cost of their bike and equipment, thanks to salary sacrifice arrangements.
Under cycle to work scheme, the purchase is made through a salary sacrifice, which means that the cost of the bike is deducted from the employee's gross salary before tax, thereby reducing their taxable income.
This can lead to substantial savings over time, making it an attractive option for many employees.
Salary sacrifice is a pivotal component of the Cycle to Work Scheme.
When employees take part in the scheme, they agree to a reduction in their gross salary for a periodβusually 12 monthsβequivalent to the cost of the bike and any associated safety equipment.
This reduction leads to lower tax and universal social charge (USC) liabilities for the employee, effectively resulting in savings on the overall cost of the bike.
However, it's important to note that the employer must pay the relevant PRSI contributions on the gross salary after the sacrifice has been made, which can influence the overall savings and financial implications for both parties.
The Cycle to Work Scheme is available to employees of participating businesses.
Employers must register with the scheme and agree to its terms, making it accessible to staff who wish to cycle to and from work.
There are typically no restrictions based on employment type, meaning full-time, part-time, and temporary employees can all take part in the scheme, provided their employer participates.
This inclusivity helps ensure that a wider range of employees can benefit from the financial and health advantages associated with cycling.
Under the Cycle to Work Scheme, employees can choose from a variety of bikes, including standard new classic bicycles and e-bikes (electric bikes), Carbon Bikes and custom made bikes.
E-bikes are particularly popular in Ireland due to their electric assistance, making longer commutes or hilly routes more manageable for cyclists.
Both options are designed to accommodate different commuting needs and preferences, ensuring that employees can find a bike that suits their lifestyle.
While the scheme encourages the purchase of new bikes, employees should also consider factors such as comfort, efficiency, and suitability for their specific commuting route when selecting their bike.
Yes, cargo bikes, including ecargo bikes, are eligible under the Cycle to Work Scheme.
This inclusion is particularly beneficial for individuals who need to transport goods or carry children during their commutes.
The versatility of cargo bikes allows employees to use them for both work and personal errands, making them a practical choice for many.
Employers must ensure that the scheme covers the cost of these specific bike types, which can be slightly higher than standard bicycles but offer great utility for the right user.
As part of the Cycle to Work Scheme, safety equipment is essential.
The scheme covers not only the bike but also necessary safety gear, such as helmets, lights, and reflective clothing.
Employers and employees alike should prioritize safety, as cycling can present risks, especially in urban environments.
By investing in quality safety equipment, participants can significantly enhance their cycling experience, ensuring they are well-protected while on the road.
The scheme encourages participants to view safety gear as an integral part of their cycling purchase, which contributes to a safer commuting culture.
One of the most appealing aspects of the Cycle to Work Scheme is the potential for substantial savings through tax exemption.
Since the cost of the bike is deducted from the employee's gross salary, participants can benefit from tax-free purchases.
This means that employees can acquire a new bike at a reduced price, effectively saving 50% off the retail price when factoring in tax savings.
This financial incentive is a significant motivator for employees considering cycling as their primary mode of transportation.
The amount saved through the Cycle to Work Scheme can vary based on the cost of the bike, the employee's tax rate, and how much they are contributing through salary sacrifice.
Generally, employees can save a substantial amount over the 12-month salary sacrifice period, with the total savings being influenced by the employee's gross salary and the applicable tax rates.
For example, a bike costing β¬2.000 could lead to savings of up to β¬1000, or similarity if the bike cost is β¬1000, employee can save about β¬500, depending on the individual's tax situation.
This makes the scheme an attractive option for anyone looking to invest in a good quality bike such as e-bike or a carbon bike and quality safety equipment without bearing the full financial burden upfront.
To qualify for the Cycle to Work Scheme benefits, employees must use their bikes for travel to and from their place of work.
Qualifying journeys typically include the direct route from home to work and vice versa; however, detours for legitimate reasons, such as dropping children at school, may also be considered.
The scheme is designed to promote regular cycling and encourages employees to integrate cycling into their daily routines.
Understanding what constitutes a qualifying journey is essential for maximising the benefits of the scheme.
There is no specific minimum cycling distance that employees must meet to qualify for the Cycle to Work Scheme.
However, the journey should be regular and consistent; employees are encouraged to cycle to work at least a few times a week to fully benefit from the scheme.
The emphasis is on promoting cycling as a habit rather than enforcing strict distance requirements, which helps ensure inclusivity for cyclists of all levels, from casual riders to daily commuters.
While there are no strict distance limitations for qualifying journeys under the Cycle to Work Scheme, it is advisable for employees to consider the practicality of cycling to work based on their individual circumstances.
For instance, employees living far from their workplace may find it challenging to cycle regularly.
Nevertheless, the scheme encourages flexibility and adaptability, allowing employees to assess their travel options and find solutions that work best for them.
Ultimately, the goal is to foster a culture of cycling as a sustainable commuting option.
Applying for the Cycle to Work Scheme involves several straightforward steps with Pedro Pedals.
First, employees should consult their HR department to confirm whether their employer participates in the scheme.
Once confirmed, the next step is to decide on the type of bike and safety equipment needed.
After selecting the bike, employees will need to complete the necessary paperwork, which typically involves a salary sacrifice agreement.
Ensuring that all documentation is accurate and submitted promptly is crucial for a smooth application process.
Employees can purchase their bike from a registered bike shop that participates in the Cycle to Work Scheme.
It is advisable to select a reputable shop that offers a range of bikes and accessories, ensuring that all needs are met.
Many bike shops may have partnerships with employers or offer additional services, such as maintenance and repairs, making them a valuable resource for participants in the scheme.
We, at Pedro Pedals - bike store in Dublin 8 are fully committed to be the best fit for your cycling needs and budget. We promise that you will leave our shop happy and happily coming back for more.Β
We not only sell new bicycles, we also buy and sell pre-owned, secondhand bikes plus we offer fast and reliable service, repairs and bike parts & accessories.Β
To apply for the Cycle to Work Scheme, employees will typically need to provide documentation that includes proof of employment, details about the chosen bike and safety equipment, and the completed salary sacrifice agreement.
Employers may have specific requirements regarding the documentation process, so it is essential to clarify these details with the HR department.
Maintaining organised records will help streamline the application process and ensure that employees can take full advantage of the Cycle to Work Scheme without any unnecessary delays.
We will help you navigate through the process so fear not and start choosing your new bike or e-bike today!Β