Cycle-to-work scheme

Non-Technical Option | Specific Example

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The cycle-to-work scheme was introduced in Ireland in January 2009, with the aim of increasing the share of cyclists during the work commute, reducing traffic congestion, lowering emissions, and improving  average health and fitness levels. The scheme covers bicycles and bicycle accessories (i.e. locks, lights, helmets, bells, mirrors, pumps, puncture repair kits, reflective clothing, etc.) up to the maximum value of €1,000, whereby employers first purchase the bicycles for employees, and then decide whether to bear the full cost of the bicycles themselves, or by salary sacrifice agreement with employees where payment is made over a maximum 12 month period. Savings are made in terms of exemptions from benefit-in-kind taxation. Thus a minimum saving (at the top tax rate) of 41% is made on the cost of a new bike.


Participation in this scheme is completely voluntary, and at the discretion of employers. However, with significant savings to be made in the form of tax exemptions, there is a strong incentive to participate. Thus the scheme is operated and implemented by individual employers, who can make a claim following the purchase of the bike as a tax exempt benefit in kind. Where it is financed via a salary sacrifice, the employee saves on income tax, levies, and PRSI. This scheme and tax exemption can only be applied once in any 5 year period in respect of any employee.


This measure is relatively new and, hence, information on the impact of it remains relatively scarce and limited to anecdotal evidence and media sources. Notwithstanding this however, the consensus appears to be fairly positive in terms of the uptake of the scheme. However, the increase in bicycle stock has also coincided with a reported increase in bicycle theft. A possible concern with this measures lies with the fact that it is potentially open to all employees of any kind despite the actual distance travelled to work. Thus, while individuals may claim to avail of the scheme to cycle to work, in actual fact the bike can be used for other purposes, and in the presence of long commutes, will most likely not be used to travel to work, and hence not impact upon bicycle modal share of trips in these cases. Irrespective the benefits even for leisure use will persist for the individual at the expense of the tax revenue lost to the state.

Costs & Benefits

Cost to employee if opting for salary sacrifice agreement, cost to employer if covering the cost of the bicycle(s), cost to Revenue in the form of tax exemptions.

Benefits include reduced emissions where motorised trip substitution occurs, improved fitness levels, reduced cost to employees in terms of parking, fuel costs or public transport costs. A healthier workforce, higher bicycle sales at shops. It is worth noting that bicycle purchases can be made anywhere in the world (i.e. including Northern Ireland or online from abroad).

Evidence & Reference

  • Specific details on the bike-to-work scheme:

  • Cost-benefit of cycle tracks:

  • Paper arguing for the introduction of spatially differentiated policies in regard to cycling:

  • Paper on the health benefits of walking and cycling:

Modelling this Measure

Cycling to work is a zero emission activity. Therefore, modelling this measure will require assumptions on the amount of people availing of this scheme, including the extent to which travel by car and/or public transport will be offset. Once these assumptions are made then modelling the measure can be completed by utilising the updated activity rates and using an appropriate model to calculate the resulting emission change.

Site Entry Created by J A Kelly on Aug 18, 2010

Reference This Source (2019). Cycle-to-work scheme. Available: Last accessed: 24th April 2019

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