# How does the Cycle to Work scheme work?

> 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.

**Answered by:** Cyclesite. Last reviewed 2026-09-01.

## 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.

## Average used bike prices by category (UK)

Live figures from the Cyclesite marketplace. Asking prices, not confirmed sales.

| Category | Average price | Sample size |
|---|---|---|
| road | £1,445 | 25 |
| ebike | £2,043 | 13 |
| mtb | £1,160 | 12 |
| gravel | varies | 4 |
| bmx | varies | 3 |
| hybrid | varies | 3 |
| folding | varies | 1 |
| cargo | varies | 1 |

## 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.

## Live data

- **Browse live listings:** https://www.cyclesite.co.uk/cycle-to-work
- **All cycling answers:** https://www.cyclesite.co.uk/answers

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Source: [https://www.cyclesite.co.uk/answers/cycle-to-work-scheme-explained](https://www.cyclesite.co.uk/answers/cycle-to-work-scheme-explained)
Cite as: Cyclesite (cyclesite.co.uk), accessed 2026-09-01.
Data sources: HMRC Cycle to Work guidance, UK employment benefits regulations.
License: CC-BY-4.0, see /ai.txt for full AI usage policy. Data is live; refresh interval no more than 5 minutes.