Tax-free travel passes: how the scheme works and what you save

A bus, rail, Luas or ferry pass bought by your employer, or through salary sacrifice, is tax-free. On a €1,500 pass that saves up to €783.83.

A monthly or annual public transport pass from your employer is one of the few perks that isn't a benefit in kind (a taxed perk). It can be given on top of your salary, or paid for out of your gross salary (before tax) through salary sacrifice. Either way, no income tax, USC or PRSI is due on it.

What qualifies

• monthly or annual bus, train, Luas and ferry passes
• issued by a public or private operator with a valid licence
• bought by your employer: it isn't enough for your employer to buy it and recover the cost from your take-home pay

If a ticket includes car parking, the parking part is taxable and your employer should split the cost. Air miles you earn from flying for work are not taxed either.

Salary sacrifice

Most employers run the scheme as a salary sacrifice: you give up part of your gross salary and your employer buys the pass with it. Revenue allows this for travel passes, bikes under the Cycle to Work Scheme and shares in an approved profit-sharing scheme, if:

• your terms of employment are changed in writing, and not backdated
• you can't swap the pass for cash or pass it to a family member
• you don't get a payment to make up for the salary given up
• the salary given up and the pass fall in the same tax year

If any condition fails, you are taxed on your full salary as if nothing had been sacrificed.

What you save

Because the pass is paid from gross pay, it costs you less than its price. For an annual pass of €1,500 bought through salary sacrifice in 2026, by a single employee:

The saving is your marginal rate of income tax, USC and PRSI applied to the price of the pass. Higher earners save more, because more of each euro would have gone in tax.

Things to check

• A lower gross salary can affect anything calculated on it, such as pension contributions set as a percentage, or a mortgage application. Ask your employer how they treat it.
• If you leave the job partway through an annual pass, your employer's scheme rules decide what happens to the rest of the cost.

Work it out

• PAYE calculator →
• Total compensation →
• Take-home pay →

Sources

• Revenue: Taxable employer benefits (medical insurance, shares and others) (checked 16/10/2026)
• Revenue: Tax and Duty Manual Part 05-01-01b: Benefit in kind on the provision of vehicles (checked 25/10/2026)

General information, not tax advice. HeyPenny is not a tax agent.