Bike to Work Scheme Question.

DeoVolente

Please excuse my ignorance but I don't know where else to ask. I couldn't quite find the answer to this question either...

I have applied for the bike to work scheme and am a mid twenties primary school teacher in the midlands. Bike plus accessories total ~€870.
Now, my employer, the Dept of Ed is telling me that I am going to pay €870 out of my salary. I thought that with tax and prsi and all that that I would in fact have to play less? I earn approx 34k a year with normal tax credits for a single male for the year and the website suggests that I will make a saving of 52% somehow, but I don't see where?

Any clarification would be great.

Dermot.

RunRoryRun

The total of 870 will be deducted from your salary before any tax is paid by you. Essentially, your employer is paying for the bike up front, and deducting it from your salary. You get to spread the payment and don't pay tax on the 870, hence saving you a %. You won't save the 52% as you would need to be in a higher tax bracket....

West_Ford

Hi i recently done the bike to work scheme. What happened to me was i got my bike and extras for 922.00. So my employer took payments off me over 12weeks and what happens is they take the money off your gross and then your taxed on your nett. so you have less gross to pay tax on . workded fine for me.

DeoVolente

Ok, so It will be my gross pay minus payment for bike and then I will be taxed on my new gross. So my taxable income for the year will be 870euros less, thus paying less forall the extras we have to pay?
That makes perfect sense now.

*no longer confused*
Thank you!

Beasty

All your answers are linked from the FAQs