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Cycle to Work Scheme

  • 20-06-2010 11:30pm
    #1
    Kevin!
    Registered Users, Registered Users 2 Posts: 1,622 ✭✭✭


    Hello,

    I was just wondering, what percentage of the bike do you get off with the cycle to work scheme?

    cheers,

    Kevin.


Comments

  • #2
    Bluefoam
    Registered Users, Registered Users 2 Posts: 7,747 ✭✭✭Bluefoam


    Usually the full thing, although you only pay 49% of the cost if you are on the higher tax band...


  • #3
    Beasty
    Administrators, Social & Fun Moderators, Sports Moderators Posts: 77,675 Admin ✭✭✭✭✭Beasty


    You basically save your marginal tax rate plus PRSI on the purchase price (up to a price of €1,000)


  • #4
    ipodrocker
    Registered Users, Registered Users 2 Posts: 1,002 ✭✭✭ipodrocker


    Kevin! wrote: »
    Hello,

    I was just wondering, what percentage of the bike do you get off with the cycle to work scheme?

    cheers,

    Kevin.

    check out all the info here.

    Bike to Work Scheme


  • #5
    penexpers
    Closed Accounts Posts: 4,038 ✭✭✭penexpers


    Beasty wrote: »
    You basically save your marginal tax rate plus PRSI on the purchase price (up to a price of €1,000)

    and the levy too?


  • #6
    Beasty
    Administrators, Social & Fun Moderators, Sports Moderators Posts: 77,675 Admin ✭✭✭✭✭Beasty


    penexpers wrote: »
    and the levy too?
    Yes - it reduces gross pay, and hence is not subject to the levy


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  • #7
    Kevin!
    Registered Users, Registered Users 2 Posts: 1,622 ✭✭✭Kevin!


    So In my understanding, I pay for the bike in full and being on the low tax band I get a credit on my taxes for €1,000?

    I'm confused as to the calculator on cyclesuperstore.ie, as It states that the bike will still cost 700 euro?

    http://www.cyclesuperstore.ie/shop/pc/bike2work.asp?idpage=140


    sorry for the lack of knowledge, not great when it comes to taxation.

    cheers,

    Kevin.


  • #8
    DualFrontDiscs
    Registered Users Posts: 932 ✭✭✭DualFrontDiscs


    Kevin,

    In overly simplistic terms:

    Without the scheme:

    1. Let's say you earn €2,000 in salary.
    2. You pay €500 in tax and have €1,500 in your pocket.
    3. You go buy a bike for €1,000.
    4. You've a nice bike and €500 in your pocket.

    With the scheme:

    1. Again, you earn €2,000 in salary.
    2. You get your employer to buy the bike for €1,000.
    3. You pay €250 in tax on the remaining €1,000 salary and have €750 in your pocket.
    4. You now have a nice bike and €750 in your pocket.

    In both scenarios you've a nice bike. With the scheme you've an extra €250 in your pocket.

    This is a simplification. Some important points:

    A) The more tax you pay, the greater the discount. Does that make sense?
    B) Typically, your employer won't take the full €1,000 from your salary in one lump sum. They'll take it out over up to 12 months. Just so you don't get a big 'hit' in the month you get the bike.

    Make sense?

    DFD.


  • #9
    Kevin!
    Registered Users, Registered Users 2 Posts: 1,622 ✭✭✭Kevin!


    DualFrontDiscs wrote: »
    Kevin,

    In overly simplistic terms:

    Without the scheme:

    1. Let's say you earn €2,000 in salary.
    2. You pay €500 in tax and have €1,500 in your pocket.
    3. You go buy a bike for €1,000.
    4. You've a nice bike and €500 in your pocket.

    With the scheme:

    1. Again, you earn €2,000 in salary.
    2. You get your employer to buy the bike for €1,000.
    3. You pay €250 in tax on the remaining €1,000 salary and have €750 in your pocket.
    4. You now have a nice bike and €750 in your pocket.

    In both scenarios you've a nice bike. With the scheme you've an extra €250 in your pocket.

    This is a simplification. Some important points:

    A) The more tax you pay, the greater the discount. Does that make sense?
    B) Typically, your employer won't take the full €1,000 from your salary in one lump sum. They'll take it out over up to 12 months. Just so you don't get a big 'hit' in the month you get the bike.

    Make sense?

    DFD.


    Thank you for the clarification, although disappointing lol.


    I was under the impression that the full cost of the bike is covered by the scheme, but now I understand that it is only a certain percentage of it dictated by your tax band (the higher it is, the more of a discount?)

    cheers,

    Kevin


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