Ireland's Bike to Work Scheme: Statutory Caps, Tax Relief & Fees
The Irish Bike to Work Scheme (Cycle to Work Scheme) allows participating employers to purchase a new bicycle, qualifying electric pedelec, or cargo bicycle, along with safety equipment, for an employee via salary sacrifice. Under Revenue regulations, higher-rate taxpayers can save up to 52% on the purchase price. Direct employer bank transfers incur a 0% processing fee, whereas third-party voucher brokers carry a 10% fee.
How the Bike to Work Scheme Operates in 2026
Under Section 118(5G) of the Taxes Consolidation Act 1997, the Cycle to Work Scheme is an employer-supported benefit-in-kind tax exemption designed to promote cycling for commuting.
The mechanism operates through approved salary sacrifice:
- You select an eligible electric bicycle, cargo bike, or conventional bicycle and qualifying safety accessories from Lifty Electric.
- Lifty issues a formal employer proforma quotation in euro.
- Your employer approves the quotation and pays Lifty Electric directly.
- You agree to a salary sacrifice arrangement where the cost is deducted from your gross salary in equal instalments over a period of up to 12 months.
- Because deductions come out of your gross income before taxes, you do not pay Income Tax, PRSI, or the Universal Social Charge (USC) on that portion of your salary.
Crucial Legal Distinction: You cannot purchase the bicycle personally and later claim reimbursement from your employer. Revenue rules strictly mandate that the employer must make the purchase directly.
Statutory Spending Limits in 2026
Revenue Ireland enforces clear spending caps based on the mechanical category of the bicycle:
Revenue Ireland Statutory Purchase Caps
| Bicycle Classification | Statutory Cap | Qualifying Technical Specifications |
|---|---|---|
| Electric Bicycle / Pedelec | €1,500 | 250W continuous motor, pedal assist, 25 km/h cut-off |
| Cargo Bike / E-Cargo Bike | €3,000 | Frame designed specifically for cargo or passengers |
| Standard Pedal Bicycle | €1,250 | Non-motorised road, gravel, hybrid, or city bicycles |
Note: These caps include the bicycle, qualifying safety equipment (helmets, locks, lights, mudguards), and delivery charges.
Tax Relief Breakdown: How Saving Up to 52% Works
The total percentage saved depends on your personal marginal tax band:
-
Higher Tax Bracket (Income over €44,000 for single individuals):
40% PAYE (Income Tax) + 4% PRSI + up to 8% USC = Up to 52% total tax relief.
An eligible €1,500 e-bike package costs you approximately €720 in net take-home salary reduction. -
Standard Tax Bracket (Income up to €44,000):
20% PAYE + 4% PRSI + typical USC = Up to 31% total tax relief.
An eligible €1,500 e-bike package costs you approximately €1,035 in net take-home salary reduction.
Direct Employer Payment (0% Fee) vs Third-Party Vouchers (10% Fee)
When submitting your Bike to Work application, how your employer settles the invoice determines whether administrative surcharges apply:
Payment Channel Fee Structure
-
Direct Employer Bank Transfer (0% Fee):
If your company pays Lifty Electric directly via Electronic Funds Transfer (EFT / bank transfer) or company corporate debit card against our formal proforma invoice, there is a 0% processing fee. You receive the full cash value of your quotation without administrative deductions. -
Third-Party Voucher Administrators (10% Fee):
If your employer mandates processing through an external voucher broker (such as TravelHub, HubEx, Cyclescheme.ie, or BikeToWork.ie), these third-party intermediaries charge substantial merchant commissions. Consequently, third-party voucher redemptions incur a 10% Lifty processing fee to cover external administrative commission charges.
Four-Year Eligibility Period Rules
Under Revenue Ireland statutory regulations, you can participate in the Bike to Work Scheme once in any four tax years.
The interval is calculated on a calendar-year tax basis, rather than a rolling 48-month count. For example, if you participated in the scheme at any point during the 2022 calendar year, you become fully eligible again on 1 January 2026.
What Safety Equipment Can Be Included?
Under Revenue rules, eligible safety equipment purchased alongside the bicycle can be bundled into the tax-exempt package:
- Cycle helmets conforming to European standard EN 1078
- Front and rear lights, dynamo packs, and reflectors
- Heavy-duty locks (Sold Secure Gold or Diamond recommended)
- Bells, horns, and rear-view mirrors
- Mudguards and chainguards
- Panniers, luggage racks, straps, and commuter bags
- Puncture repair kits, cycle clips, and tyre pumps
- Reflective jackets, armbands, and high-visibility clothing
Ineligible Items: Child seats, child trailers, helmets for children, sports GPS computers, cycle clothing that is not reflective, and standalone conversion kits are expressly excluded from the scheme.
Step-by-Step Guide to Applying with Lifty Electric
- Select Your Bike: Browse our road-legal pedelecs (including the flagship CUBE Kathmandu Hybrid, Fiido, ENGWE, or lightweight UTO OG16) and accessories.
- Generate Your Quote: Visit our Bike to Work Scheme Hub and enter your bicycle and accessory choices. We generate an official employer-ready proforma invoice.
- Submit to HR / Payroll: Forward the quotation to your employer's HR or payroll team, or submit it through your company's benefits portal.
- Employer Payment: Your employer issues payment via direct bank transfer (0% fee) or issues a third-party voucher.
- Collection or Delivery: Once payment clears, we perform full pre-delivery inspection (PDI) in our Dublin workshop and arrange showroom collection at 157 Capel Street, Dublin 1, or nationwide delivery across Ireland.
Start Your Bike to Work Quote Today
Ready to save up to 52% on your daily commute? Generate an official, employer-ready quotation in minutes through our dedicated portal. Our team at 157 Capel Street is available to assist with employer setup and proforma invoicing.
GO TO BIKE TO WORK HUB →Frequently Asked Questions: Irish Bike to Work Scheme
What happens if the e-bike costs more than €1,500?
You still receive full tax relief on the statutory €1,500 limit. The excess amount over €1,500 does not qualify for tax exemption and is settled directly by you, either via payroll deduction from net pay or direct payment to Lifty Electric, depending on your employer's scheme policy.
Can I buy an electric scooter through the Bike to Work Scheme?
No. Under Revenue Ireland rules, electric scooters, mopeds, and motorcycles are expressly excluded from the Bike to Work Scheme. The scheme applies solely to pedal bicycles, qualifying pedelecs, and cargo bikes.
Does my employer have to offer the scheme?
Employer participation is voluntary under Irish law. However, because the scheme is cost-neutral to employers and saves employers 11.05% in employer PRSI contributions, the vast majority of Irish companies readily participate.
Can I use the bicycle at weekends?
Yes. Under Revenue guidance, the bicycle must be used mainly for qualifying work journeys (commuting between home and work or between workplaces), but leisure and weekend cycling is entirely permitted.
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