## What the scheme is
The Cycle to Work scheme is a tax efficient way to buy a bicycle and safety equipment for commuting to work. The employer purchases the bike, the employee repays through salary sacrifice over up to 12 months, with no PAYE, USC, or PRSI on the deductions.
## 2026 limits
| Bike type | Maximum cost |
| --- | --- |
| Standard pedal bike | €1,250 |
| Electric bike (pedelec) | €1,500 |
| Cargo or e cargo bike | €3,000 |
## Refresh cycle
Each employee can use the scheme once every four years. The countdown starts from the tax year of purchase. So a 2026 purchase means the next eligible year is 2030.
## What you can buy
- The bicycle itself
- Helmet
- Lights and reflective gear
- Locks
- Mudguards, panniers, racks
- Bell, pump
- Reflective clothing
You cannot include accessories not directly safety related (e.g. cycling computers).
## How the salary sacrifice works
1. Employer purchases the bike (often through a scheme provider)
2. Employee receives the bike
3. Employee's gross pay is reduced over up to 12 months by the cost
4. Reduction is before PAYE, USC, and PRSI
## Worked example
Aoife earns €60,000. She buys an e bike worth €1,500 over 12 months.
- Monthly deduction from gross pay: €125
- Tax saved at marginal 52 percent: €65 per month
- Net cost: €60 per month, total €720 over 12 months
- Saving: €780 across the year
## Effect on payslip
You will see the deduction on your payslip as "Cycle to Work" or similar. Gross pay drops by the agreed amount each month. Net pay drops by less because tax savings reduce the impact.
## Eligibility
To qualify:
- The bike must be primarily used to cycle to or from work, or between work locations
- The employer must operate the scheme
- The salary sacrifice must be a genuine reduction, not a top up
## Effect on pension and PRSI history
Salary sacrifice reduces the gross pay used for some calculations, including pension contributions and possibly PRSI insurable weeks at very low pay. Consider these effects before sacrificing a large amount.
## Educational notice
This article is general guidance. Always check current scheme limits with Revenue.ie before entering an agreement.