Commuting in Ireland is becoming smarter, greener and more cost effective. Especially when an employee can take advantage of the two government-backed tax incentives that are the Cycle to Work Scheme and the TaxSaver Commuter Ticket Scheme. What many people may not consider is that the two schemes can be used together to create an even more flexible and eco-friendly commute that saves you time and money.
What are These Schemes?
Cycle to work scheme
The Cycle to Work initiative gives you the opportunity to sacrifice part of your salary in return for one bicycle and allowable safety equipment. Under the scheme you don't pay Income Tax, PRSI or Universal Social Charge on the price of the bicycle and/or safety equipment. To take part in the Cycle to Work scheme employees will need to agree to reduce (sacrifice) an agreed amount of their salary for a set amount of time, which can be no longer than 12 months.
Allowances Based on Bicycle Type
- €1250 for standard bicycle with no assistance
- €1500 for and electric bicycle (e-bike)
- €3000 for a cargo or electric cargo bicycle
An employee can save up to 51% if they earn on the higher rate of tax or 31% on the lower rate. You can avail of the cycle to work scheme every four years. The scheme does not cover: motorbikes, scooters or mopeds; second-hand bicycles or equipment; bicycle parts or associated equipment.
TaxSaver Commuter Ticket Scheme
This program offers significant savings (up to 52%) on monthly or annual public transport tickets. Employers can deduct the cost from gross salary, reducing tax, PRSI, and USC contributions. It covers:
Dublin Bus
Bus Éireann
Luas
DART
Irish Rail
Some private coach operators
Using Both Schemes together
The good news is that an employee can avail of both schemes together provided their employer participates in each of them. In doing so, you can take part in a highly efficient, multimodal commute that combines the speed of public transport with convenience and health benefits of cycling.
Here's some example of how this can work.
1. Cycle to Your Nearest Station or Bus Stop
If you live a bit too far from a train station, bus or Luas stop, you can purchase a bike and high quality bicycle lock using the Cycle to Work Scheme. You will then complete the journey to the stop or station and lock the bike up securely. No need for a car or hassle with parking.
2. Take a Folding Bike on Public Transport
Did you wish to take your bike with you? A folding bike might be the more suitable option. This can be referred to as the first and last mile commuting option. A compact folding bike is not restricted on public transport and can be brought onboard without restrictions. Full sized bikes can only be brought on certain modes of public transport and will often be restricted during peak commuting hours.
Benefits of Combining the Schemes
Savings: Lower your transport costs by taking advantage of the tax relief on both bike and travel tickets
Time Efficiency: Reduce waiting time and increase flexibility by cycling the shorter legs of your journey
Health & Fitness: Incorporate exercise into your daily routine to improve your mental and physical health.
Environmental Impact: Contribute to emission reduction by cutting out car journeys and using greener modes of transport
Less Stress: Avoid traffic congestion and parking requirements.
A Real-Life Example
Jake commutes to Dublin city from the outskirts of Donabate using Irish Rail more than three times a week. Previously, Jake would drive to the station and would have to pay for parking in the car park. Then once in Dublin city they would complete a walk to their office.
Combing the Cycle to Work scheme and TaxSaver Ticket scheme, Jake was able to purchase a folding bike and ticket for his commute. He is earning on the higher rate.
Folding bike Cost €1500
Dublin City Commuter Zone 1 Annual Ticket €960
Total cost €2,440
Tax saving €1,196
Cost per month (first 12 months) €100
Cost per month (after 12 months) €39
After the bike has been paid off on the cycle to work scheme, the only requirement is to purchase the ticket for public transport. He has eliminated the need for reliance on his car and avoided extra costs such as parking and or a taxi to the station. The commute has been streamlined and is more flexible than before.
Final Thoughts
Irish commuters are uniquely positioned to take advantage or two excellent tax schemes that promote healthier, greener and more economic travel. Whether you cycle to your nearest transport hub or bring your folding bike onboard, combining these scheme can help transport your commute for the better. To get started, visit here to learn more.
