Cycle to work scheme

No.username

Hey folks, im looking to get a bike on the cycle to work scheme. I have picked out the bike and gear, which comes to a total of €445. I used an online calculator which says the total cost to me is €218. My question is.. Is €218 all i pay out of my salary, or do i pay €445 and recieve the savings in the form of tax credits or something!

Also while im here i may as well ask whats your views on the bike i was thinking of. Its a Felt q220, any thoughts? Ill mainly use it for going for a spin on the nice evenings were getting and maybe a bit of novice trails.... Oh and of course getting to work

Cheers

TinyExplosions

It's taken out of your pay before tax, so you should only see a reduction of 218ish in your take home pay

MagicMarker

Are you sure your sums are correct? How is the cost to you less than half of the total cost?

Inquitus

MagicMarker wrote: »

Are you sure your sums are correct? How is the cost to you less than half of the total cost?

If you are in the top rate you save up to 52% afair.

MagicMarker

My bad, I'd read elsewhere that it was 49% max, hence the confusion.

No.username

Thanks for the replies folks

terenc

Simple , if on the high rate of tax then you pay back half the cost of the bike(include prsi), if on low rate you dont come out so good, but still make a saving:):D

Squidgy Black

Anything over 32k a year before tax means you save 52 percent, anything under is around 30 percent.

LJL

hi,

im very confused about this bike to work scheme so any advice would be appreciated. I am on the low rate of tax and im looking at a bike costing €500.
does my employer pay for some of the bike or how does this scheme work.

as far as i have been told, the employer pays and then i pay him back monthly through my wages?

instinct

My employer just gave me a cheque for €1000.

This is deducted from my salary before tax.

It may work differently depending on your employer i.e. they pay the shop directly but either way, they will pay and deduct your wages over 12 months.

IMO - you should get the best bike you can afford. Get the most savings possible in terms of paying back before tax. The scheme can only be used once every 5 years so make the most of it.

MagicMarker

LJL wrote: »

hi,

im very confused about this bike to work scheme so any advice would be appreciated. I am on the low rate of tax and im looking at a bike costing €500.
does my employer pay for some of the bike or how does this scheme work.

as far as i have been told, the employer pays and then i pay him back monthly through my wages?

Your employer pays outright for the bike by cheque. You pay your employer back over a maximum of 12 months. The monthly payment is taken from your gross pay meaning you pay less tax and this is where the saving is made.

Cookie_Monster

you can take the hit all in one go also rather than over 12 months, can't you?

leeroybrown

Cookie_Monster wrote: »

you can take the hit all in one go also rather than over 12 months, can't you?

The only stipulation is that the maximum period of repayment is 12 months. Most employers spread the repayments over the maximum period.

Hrududu

Cookie_Monster wrote: »

you can take the hit all in one go also rather than over 12 months, can't you?

Yes you can. My employer only allows you to pay it back over a period of 1-3 months. So the maximum period may differ depending on where you work.

Squidgy Black

LJL wrote: »

hi,

im very confused about this bike to work scheme so any advice would be appreciated. I am on the low rate of tax and im looking at a bike costing €500.
does my employer pay for some of the bike or how does this scheme work.

as far as i have been told, the employer pays and then i pay him back monthly through my wages?

You get a quote for the bike, the employer gives you a voucher or check for the full amount of the bike. You only pay back 350 of it on a monthly basis which ranges from 1-12 months depending on how long you choose.

Lower rate of tax saves 30 percent, higher saves 50

Highway_To_Hell

Cookie_Monster wrote: »

you can take the hit all in one go also rather than over 12 months, can't you?

The company I work for take the payment in one go with no option to spread the payments over 12 months.

Kiith

Don't want to hijack this, but just a quick question. If the bike i wanted to get was more then €1000, would i be able to pay the excess myself?

Cookie_Monster

Kiith wrote: »

Don't want to hijack this, but just a quick question. If the bike i wanted to get was more then €1000, would i be able to pay the excess myself?

it's allowed under the rules of the scheme, however your employer may not allow it, they can put pretty much whatever restrictions they want on it

MagicMarker

My employer allowed it but they said any excess would be taken from my net pay, not sure how they would have done that though unless I just physically gave them the money. But if that's the case you're not saving anything on the excess, so you're probably best off just getting a max of 1k from your employer and paying the difference in store.

Kiith

I was talking to HR there, and they said i could pay the excess myself in the shop. Time to go find myself a good Cube MTB.

Kiith

Ok, one last question...for today at least.

I'm looking at a bike that's around €1350, so i'm just trying to break down the costs. I'll have to pay the €350 myself, which is fine. Then i'm spreading the payment over 6 months, so it would be €1000 - €100 (10% discount that we get from the shop) - €279 (31% discount on €900) = €621 or €103.50 a month for 6 months.

Am i working that out right?

leeroybrown

My employer imposes a €1k limit (mainly for their own administrative convenience I think) but most of the cycle shops they deal with will allow you to pay more and only invoice for the €1k limit.

Beasty

MagicMarker wrote: »

My employer allowed it but they said any excess would be taken from my net pay, not sure how they would have done that though unless I just physically gave them the money.

It's relatively straighforward:

Let's assume you have a monthly income of €2k (gross), €100 payments for the bike under the scheme (so you are paying off €1,000 over 10 months), and another €50 top up you are paying outside the scheme

To keep it simple, let's assume your tax rate is 50%

Gross income €2,000
BTW payment -€100
taxable income €1,900
tax at 50% -€950
top-up -€50
Net pay €900 salary transfererd to your bank account

(without the scheme your net pay is 50% x €2,000 = €1,000. You have paid €50 (€100 less 50% tax relief) under the scheme, plus €50 top-up)

Cork24

What about I want a bike for 1775 pay 775 and the other 1000 with the cycle to work is this allowed

Beasty

Cork24 wrote: »

What about I want a bike for 1775 pay 775 and the other 1000 with the cycle to work is this allowed

Yes, if your employer's scheme rules allow this

Cork24

I have to get onto my Work and they will give me a yes or no, If i could pay 775 and the 1k under the Cycle to Work