Cycle To Work Scheme [ALL YOU NEED TO KNOW]

August 4, 2022 9:33 am Published by

Cycle To Work Scheme

The UK Government introduced the Cycle to Work Scheme to encourage employees to get on their bike and cycle to work, in order to create a healthier workforce and lower emissions from cars, taxis, busses etc.

Cycle to work: Employees

If you’re an employee and would like to start cycling to work through the Cycle to Work Scheme, you’re in the right place to find all the information you need.

How does it work?

The Cycle to Work Scheme allows you, the employee, to get a new bike and accessories to commute to work. It works through a salary sacrifice, where you give up a part of your salary in exchange for a benefit – the bike and/or the accessories.

This is deducted from your salary before tax (gross salary), meaning you’ll pay less Income Tax and national insurance! You can eventually save up to 25-39% on the cost of a bike and accessories over time. The deduction will be taken before Tax and National Insurance.

You sign up to the scheme and receive a pin. Once this has been set up you choose your bike and accessories and then receive a written quotation to submit to the Cycle to Work scheme provider. The invoice and hire agreement then get sent to your employer, you both sign the hire agreement. Once this has been completed, your employer will give you a voucher to go and collect your new bike and accessories.

Am I eligible?

If you receive your salary via Pay As You Earn (PAYE), and are 16 or over, you are eligible for the Cycle to Work Scheme. Your employer needs to be signed up and your earnings should be more than the National Minimum Wage after the salary sacrifice is taken from your gross salary.

Cycle to Work Scheme: National Minimum Wage

HMRC’s guidance recommends, that where an employee is near National Minimum Wage, the employee should be offered a lower value cycle package, and/or a longer than usual hire period to avoid the salary dropping below the NMW and the employee being excluded from the scheme.

“A salary sacrifice agreement must not reduce an employee’s cash earnings below the National Minimum Wage (NMW) rates. Employers must put procedures in place to cap salary sacrifice deduction and ensure NMW rates are maintained.”

Why Should I join the Cycle to Work Scheme?

The scheme allows employees to obtain commuter bikes and cycling accessories through their employer, whilst spreading the cost over 12 months and making savings through a tax break.

You sacrifice part of your salary, therefore temporarily lowering your income slightly. Your income tax and national insurance are based on the lower figure, so the amount you pay is less.

If you’re looking for a new bike to commute to work on, this is the perfect scheme for you.

Cycle to work: Employers

If you want a happier and healthier work force, the cycle to work scheme is a great thing to offer your employees. Many people are adopting a more health-conscious lifestyle nowadays, therefore cycling to work is great for this. Also, it can help reduce your employees carbon footprint, as cycling is a great alternative to using polluting vehicles.

Employers can make savings of up to 15% through National Insurance contributions.

How does it work?

To begin with, employers must enter an agreement with a Cycle to Work Scheme provider. Then employees can enquire about the cycle to work scheme through the provider your business has registered with.


How do I choose a provider?

  • Check that they are regulated by the FCA for consumer hire of cycles
  • Usually, they will have a number of retailers they offer, you should check that these work for you (choice, location etc).
  • Take the time to research providers and find one that you are confident with

Implementation Guidelines for Employers

How Can Spectrum Help?

At Spectrum we can help you as an employer to discuss how the CTW scheme will affect your business. We can talk you through the process and help you with any questions you may have.

If you need any help and advice, contact Spectrum on 01179 902218 or email us on

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This post was written by Daisy Vowles

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