Taxsaver Commuter Ticket Scheme

The Taxsaver Commuter Ticket Scheme reduces the cost of using public transport. Employers can make PRSI savings of up to 10.75%. Employees can save between 28.5% and 52% of travel costs due to tax, PRSI and USC savings. The ticket covers bus, rail, and the Luas.

You can talk to your employer about participating in the scheme. Your employer will then apply and buy your ticket. Your employer must be registered with Taxsaver and orders must be processed by your company administrator. Employees cannot apply for the scheme or buy the ticket themselves.

The Taxsaver scheme is run (in conjunction with Revenue) by:

• Dublin Bus
• Bus Éireann
• Luas
• Irish Rail
• Approved transport providers

Employees can get tickets as part of their salary package (salary sacrifice) instead of an annual cash bonus or as a benefit-in-kind.

Taxsaver tickets are not subject to tax, PRSI or USC. Employees must only pay tax, PRSI, and USC on the ‘money’ portion of their salary. Employer PRSI is also calculated on the ‘money’ portion of the employee's salary.

There is a 20% average reduction in Taxsaver fares from 1 April 2022 to the end of 2025. This applies to all monthly and yearly tickets provided by Iarnród Éireann, Bus Éireann, Dublin Bus, Luas, and Go-Ahead Ireland.

See taxsaver.ie for more information or contact your employer to order a ticket.

Who can apply for a Taxsaver ticket?

Employees, including company directors, can participate in the TaxSaver scheme if their employer applies for and provides commuter tickets.

Contract between employer and employee

Employees who want to join the TaxSaver scheme select the ticket type they need. Employers and employees then sign a contract setting out the terms of the Taxsaver scheme. The Taxsaver contract (between the employer and employee) must be agreed and signed before the employer applies for a Taxsaver ticket. Both parties must review the conditions of the contract. For example, the contract should state what happens if an employee leaves the company before the ticket expiry date.

A signed Taxsaver contract usually lasts for 12 months. If, for example, an employee goes on holiday during that time, they cannot return the ticket, or get a refund for the time spent away and reclaim the ticket upon returning.

If an employee returns a ticket to an employer before the 12 months is up, they can rejoin the scheme again after the 12 months have expired. However, the company may get a refund for the portion of the year not used by the employee.

Tickets are strictly non-transferable and cannot be exchanged for cash benefits.

Once a contract between the employer and employee has been signed, the employer applies the tax conditions set out below and applies to the relevant transport provider.

Tax conditions

The terms and conditions of employment must be changed to refer to the Taxsaver ticket (to highlight that you are choosing a benefit instead of a salary). The change must not be retrospective and must be in writing.

Employees cannot exchange the benefit for cash.

The choice to accept benefit instead of cash cannot be made more than once a year, and then only with the consent of the employer.

Taxsaver payment options

Employees can participate in the scheme in one of 3 ways:

Salary sacrifice

Employees can get TaxSaver commuter tickets as part of their basic salary package by choosing salary sacrifice.

Example of salary sacrifice

If the annual cost of a bus and rail ticket is €1,800 and an employee earns €30,000 per year: Instead of buying the ticket for €1,800, the employee can agree to a ‘salary sacrifice’. So, their salary is reduced by €1,800 a year, or €34.62 per week, to cover the cost of the annual ticket (€1,800 divided by 52 weeks).

The employee will not be charged tax, PRSI, or USC on the portion of salary they sacrificed (€1,800). Instead, they only pay tax, PRSI and USC on €28,200. (€30,000 minus €1,800).

The employer will claim an expense for salary paid to employees.

If an assumed 10.75% rate applies, the employer PRSI would be €3,031.5. (10.75% of €28,200).

The employer will pay and claim €28,200 salary (plus employer PRSI) using salary sacrifice. This comes to €3,031.5 (this is where the employer saves), plus a deduction of €1,800 (the cost of the ticket).

The cost of the ticket is now regarded as an allowable expense for Section 118 (5A) of the Tax Consolidation Act 1997 as amended by Section 8 of the Finance Act 2005.

Example without salary sacrifice

The employer will pay €30,000 in salary and claim an expense of €30,000 (plus the employer PRSI). The employer PRSI would be €3,225. (10.75% of €30,000).

Cash Bonus

As an alternative to salary sacrifice, an employer can offer employees TaxSaver commuter tickets instead of a cash bonus. As cash bonuses are taxed and commuter tickets are not, tickets provide better value to employees than cash bonuses.

Benefits-in-kind

A third way for employers and employees to benefit from the scheme is for employers to offer employees TaxSaver commuter tickets as a benefit-in-kind. For example, instead of a parking space at work, or as an incentive for an employee to stay with the company.

Can a Taxsaver ticket be cancelled?

Your company administrator must contact the relevant provider (Iarnród Éireann, Dublin Bus or Bus Éireann) before cancelling a ticket. If a ticket is cancelled, you may be due a refund. This depends on the ticket type (annual or monthly) and when the ticket is cancelled.

See the Taxsaver website for refund calculations and more information.

There are different types of monthly and annual tickets available. Tickets can also be used for personal travel outside of office hours.

Monthly tickets are valid for one calendar month and can be bought up to 2 weeks in advance. Annual tickets are valid for one year from the first day of any month and can be bought anytime.

You can use the online calculator to calculate savings.

Applying for the scheme

• Employees choose the TaxSaver commuter ticket type.
• Employees must give a digital photo to their employer for the ticket.
• The employer and employees sign a contract, subject to the rules of the scheme.
• The employer applies the required Tax Conditions and registers with the public transport provider.
• The employer makes a group application on behalf of employees by post, e-mail or online.
• Companies must keep a receipt of purchases and a copy of the ticket for their tax records.

More information is available on Taxsaver.ie, or the FAQs page and from the following websites:

• Dublin Bus
• Bus Éireann
• Luas
• Irish Rail

Information on commuter tickets may also be available from approved private operators.