Bike to Work Scheme: What It Is and How to Apply in the UK

The “bike to work scheme” is what most people call the government-backed Cycle to Work Scheme — a salary sacrifice arrangement that lets you get a new bike through your employer and pay less income tax and National Insurance in the process. If your employer is signed up, a basic rate taxpayer saves around 28% on the cost; a higher rate taxpayer saves around 42% (HMRC rates, 2026/27).

This guide covers who’s eligible, how to apply step by step, and what to expect at the end of the hire period.

Is “bike to work” the same as “cycle to work”?

Yes. The official name — as used in HM Treasury and Department for Transport guidance — is the Cycle to Work Scheme. “Bike to work”, “bike to work scheme”, and “bike scheme” are all informal names for the same programme, legislated under Section 244 of the Income Tax (Earnings and Pensions) Act 2003. Any provider using the phrase “bike to work” is running the same kind of salary sacrifice hire arrangement.

Who can use the bike to work scheme?

To be eligible you must:

• Be employed and paid through PAYE (not self-employed or a sole trader)
• Earn enough that your take-home pay after the deduction does not fall below the National Living Wage — £12.71 per hour for workers aged 21 and over from April 2026 (GOV.UK)
• Work for an employer that has joined a scheme provider
• Intend to use the bike mainly for qualifying journeys — commuting to your regular workplace must account for at least 50% of use, per the DfT guidance published in June 2019

If you are self-employed, the salary sacrifice mechanism is not available to you through a provider. There are other options worth knowing about — see cycle to work for the self-employed for what may apply.

What can you buy on the scheme?

The scheme covers:

• A new bike, including e-bikes that meet the EAPC standard (motor up to 250W, cuts out at 15.5mph/25km/h — no licence or insurance required, per GOV.UK)
• Cycling safety equipment: helmet, lock, lights, hi-vis gear, panniers, waterproof jacket, and similar accessories
• Accessories-only packages, if you already have a bike

Second-hand bikes, cargo bikes above the EAPC limit, and non-cycling accessories do not qualify.

How to apply: step by step

1. Check if your employer is registered. Ask HR or your payroll team which provider they use. Common providers include Cyclescheme, Cycle2Work, Green Commute Initiative, Bike2Work and Cycle Solutions. If your employer isn’t registered, they can join a provider for free — worth asking. For a side-by-side comparison, see Cyclescheme vs Cycle2Work vs GCI.
2. Choose your bike and equipment. Browse participating retailers online or in store. The provider’s website lists which shops accept their scheme.
3. Apply via the provider’s portal. You’ll need your employer’s code or name, your work email address, and the total value you want to apply for, up to any limit your employer has set.
4. Your employer reviews and approves the application. They pay the provider directly for your package — you don’t pay anything upfront.
5. Receive your eCertificate or voucher. Use it in-store or online to collect your chosen bike and equipment.
6. Sign the hire agreement. You’re hiring the bike from your employer (or from the provider, depending on the scheme) for the hire period — typically 12 months, though some higher-value packages run for 18 or 24 months. No credit check is required; FCA-authorised providers structure the agreement so consumer credit rules do not apply.
7. Monthly deductions begin. The hire cost is taken from your gross pay before income tax and National Insurance are calculated. That’s where the saving comes from — you’re not paying tax on the portion of your salary used to hire the bike.
8. At the end of the hire period, choose an ownership option. Depending on your provider, you can pay a fee to own the bike outright, extend the hire at no extra cost, or return it. For a full breakdown of how the ownership transfer works, see cycle to work end of hire explained.

Is there still a £1,000 limit?

Not necessarily. The original £1,000 cap applied when employers were required to hold a consumer credit licence to run their own scheme. In June 2019, the Department for Transport updated its guidance to allow scheme providers authorised by the Financial Conduct Authority to offer packages above £1,000 — meaning bikes worth £2,000, £3,000 or more are now accessible through most major providers. Your employer sets the maximum they’ll allow. For more detail on how the higher-value scheme works, see cycle to work over £1,000.

Some employers still apply their own cap, particularly in the public sector. It’s worth checking your employer’s policy before you choose a bike. See cycle to work eligibility, limits and rules for the full picture.

How much could you save?

The saving comes from paying the hire cost out of your gross salary, which reduces the income tax and National Insurance you owe. Based on the 2026/27 HMRC rates:

• Basic rate taxpayer: 20% income tax + 8% employee National Insurance = approximately 28% saving on the value of the package
• Higher rate taxpayer: 40% income tax + 2% employee NI = approximately 42% saving

On a £1,000 bike, a basic rate taxpayer saves around £280; a higher rate taxpayer around £420. For worked examples at different price points, try the cycle to work savings calculator guide.

Is the scheme still worth using in 2026?

There have been no major legislative changes to the scheme since the June 2019 DfT guidance. The tax treatment remains the same, and the removal of the £1,000 cap for FCA-authorised providers still stands. For a detailed look at what’s current, see cycle to work scheme 2026. And if you want a straight answer on whether the numbers add up, is the cycle to work scheme worth it? runs through the scenarios where it does and doesn’t make sense.

If you’re interested in a scheme with no upper limit on bike value regardless of employer, the Green Commute Initiative is worth a look — it operates on a different model that removes the employer monetary cap entirely.

Frequently asked questions

Does my employer have to offer the bike to work scheme?

No. Employers join voluntarily. If yours doesn’t offer it, you can ask HR to register with a provider — it costs nothing for most employers to set up, and they save on employer National Insurance contributions too.

Can I use the bike to work scheme for an electric bike?

Yes, provided the e-bike meets the EAPC standard: a motor of no more than 250W that cuts out at 15.5mph (25km/h), per GOV.UK guidance. An EAPC requires no licence or insurance to ride on UK roads.

What happens if I leave my job before the hire period ends?

Your employer will typically ask you to repay the outstanding balance, usually as a lump sum deducted from your final salary. Check the hire agreement carefully before you hand in your notice.

Do I need a credit check to use the bike to work scheme?

No. The hire arrangement used by FCA-authorised scheme providers is structured so that no credit check is required from the employee.

I’m self-employed — can I still get a bike tax break?

The salary sacrifice scheme is only available through an employment arrangement. If you’re self-employed, there are other options — see cycle to work for the self-employed for what HMRC allows.