Updated for the 2026/27 tax year. Rates verified against HM Treasury figures (personal allowance £12,570; basic rate 20%; higher rate 40%; employee National Insurance 8% / 2%).
What is the Cycle to Work scheme?
The Cycle to Work scheme is a UK salary sacrifice benefit. Your employer pays for a bike (and safety equipment such as lights, a helmet and a lock), and you hire it from them — typically over 12 months — with the cost taken from your gross salary. Because the deduction happens before income tax and National Insurance are calculated, you save both on the full amount.
Since 2019 there is no upper spending limit set by the scheme rules themselves: if your employer’s scheme allows it, e-bikes and cargo bikes costing several thousand pounds qualify. E-bikes are eligible; motorbikes and scooters are not. The bike should be used mainly for commuting, but normal personal use alongside that is fine.
How much do you actually save?
- Basic rate taxpayer (income £12,571–£50,270): you save 20% income tax + 8% National Insurance = ~28%
- Higher rate taxpayer (£50,271–£125,140): 40% + 2% = ~42%
- Additional rate (above £125,140): 45% + 2% = ~47%
Use the calculator below to see your numbers.
Savings calculator
Things to check before you sign up
- Minimum wage floor: the deduction cannot take your hourly pay below the National Minimum Wage (£12.71/hour from April 2026 for over-21s), so very large bikes on modest salaries may be capped by your employer.
- End of the hire period: you usually take ownership via a small transfer payment based on HMRC’s fair-market-value table, or extend the hire at no extra cost. Ask your provider how they handle it.
- Provider: most employers run the scheme through Cyclescheme, Cycle2Work (Halfords) or the Green Commute Initiative — each has different shops and end-of-hire arrangements. See our provider comparison for the differences that matter.