Cycle to Work Scheme Calculator
Calculate how much you can save on bikes and accessories through salary sacrifice
How the Cycle to Work Scheme Works
The Cycle to Work scheme is a government-backed initiative that allows employees to save money on bikes and cycling equipment through salary sacrifice. Instead of paying for your bike from your net income after tax, the cost is deducted from your gross salary before tax and National Insurance calculations.
Save on Income Tax and National Insurance contributions by paying from your gross salary.
Pay for your bike over 12, 18, or 24 months with interest-free instalments.
Get your bike immediately without any initial payment required.
Choose from thousands of bikes and accessories at participating retailers.
Savings by Tax Rate
| Tax Rate | Income Tax | National Insurance | Total Savings Rate |
|---|---|---|---|
| Basic Rate | 20% | 12% | 32% |
| Higher Rate | 40% | 2% | 42% |
| Additional Rate | 45% | 2% | 47% |
Eligibility and Requirements
To participate in the Cycle to Work scheme, you must meet certain criteria and follow specific guidelines.
Who Can Apply
Most UK employees paid through PAYE can participate, provided their employer offers the scheme. You must remain above the National Minimum Wage after the salary sacrifice deduction.
Usage Requirements
You must use the bicycle mainly for qualifying journeys, meaning more than 50% of its use should be for commuting to work or part of your work journey. This includes cycling to transport hubs like train stations.
Agreement Period
The bike remains the property of your employer during the hire period, which typically lasts 12-24 months. At the end of this period, you may have the option to purchase the bike for its fair market value.
Frequently Asked Questions
If you leave your employment, you’ll typically need to settle the remaining balance or return the bike to your employer. Some schemes may allow you to continue payments independently.
Yes, you can purchase safety equipment and cycling accessories alongside your bike, including helmets, lights, locks, clothing, and maintenance tools.
There’s no government-imposed price limit, but individual scheme providers and employers may set their own limits. Many schemes now accommodate high-value e-bikes and premium bicycles.
No, you don’t need to cycle every day, but you must use the bike mainly (more than 50%) for work-related journeys. HMRC doesn’t expect detailed records but looks for obvious compliance.
Generally, you can only have one active agreement at a time with the same employer. However, you may be able to start a new agreement after completing your current one.
Getting Started
Ready to start saving on your new bike? Here’s how to get started with the Cycle to Work scheme.
Step 1: Check Employer Participation
Confirm that your employer offers a Cycle to Work scheme. If they don’t, you can encourage them to set one up, as employers also benefit from National Insurance savings.
Step 2: Choose Your Bike
Visit participating retailers to select your bike and any accessories. Consider your commuting distance, terrain, and storage requirements when making your choice.
Step 3: Complete the Application
Submit your application through your employer’s chosen scheme provider. You’ll need to specify the bike details and agree to the hire period.
Step 4: Start Saving
Once approved, collect your bike and begin making monthly payments through salary sacrifice. Monitor your payslips to see your tax and National Insurance savings.