How does the Cycle to Work scheme work?
Direct answer · Cyclesite
The Cycle to Work scheme lets UK employees buy a bike through salary sacrifice, saving 25–39% on the cost depending on your tax bracket. Your employer pays for the bike upfront, and you repay through monthly pre-tax salary deductions over 12 months. At the end, you can buy the bike outright for a small residual fee (typically 3–7% of original price). The scheme covers bikes, e-bikes, and accessories.
Last reviewed: 2026-05-07
How the scheme works
Your employer partners with a Cycle to Work scheme provider (e.g., Cyclescheme, Bike2Work, Green Commute Initiative). You choose a bike from a participating retailer, your employer pays for it, and the cost is deducted from your gross salary over 12 months. Because deductions are pre-tax, you save on income tax and National Insurance.
How much you save
Basic rate taxpayers (20%) save approximately 32% (income tax + NI). Higher rate taxpayers (40%) save approximately 42%. On a £1,000 bike, that's £320–£420 saved. Some schemes have no upper price limit, though the original £1,000 cap was effectively removed in 2019.
At the end of the hire period
After 12 months, you have three options: buy the bike at fair market value (typically 3–7% of original price), extend the hire agreement, or return the bike. Almost everyone chooses to buy, for a £1,000 bike, the buyout is typically £30–£70.
Related Questions
Can I use Cycle to Work for a used bike?
The standard scheme is for new bikes from participating retailers only. However, once you own the bike after the hire period, you could sell it and buy a used upgrade. Some employer schemes now accept refurbished bikes, check with your provider.
Is there a price limit on Cycle to Work?
The original £1,000 limit was effectively removed in 2019 when the government updated guidance. Most schemes now offer bikes up to £5,000+, though some employers set their own caps. The Green Commute Initiative has no upper limit.
Can I get an electric bike on Cycle to Work?
Yes, e-bikes are eligible for the Cycle to Work scheme as long as they meet UK regulations (motor assist up to 15.5mph, 250W motor). E-bikes are the most popular Cycle to Work purchase due to the significant savings on expensive bikes.
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