The package price your employer will hire to you.
Gross, before tax.
Employers save 15% NI on your sacrifice. A few pass some of it on.
For the minimum wage check.
You save
£315.00 (21%)
Income tax £300.00 and National Insurance £120.00 saved, against an ownership fee of £105.00.
What the bike costs you
£1,185.00
Against £1,500.00 paid outright.
Gross deduction a month
£125.00
Taken from pay before tax for 12 months.
| Option | Fee | Net cost | Saving |
|---|---|---|---|
| Own after 4 years | £105.00 | £1,185.00 | 21% |
| Own after 12 months | £375.00 | £1,455.00 | 3% |
| Hand it back | £0.00 | £1,080.00 | 28% |
How the saving is worked out
Salary sacrifice moves the bike's price out of your taxable pay over a 12 month hire. The tool works out the income tax you would have paid on that slice of salary with the GOV.UK bands for 2026 to 2027 (Personal Allowance £12,570, tapering above £100,000; 20%, 40% and 45% in England, Wales and Northern Ireland; the six Scottish bands from 19% to 48%) and the employee National Insurance at 8% between £12,570 and £50,270 and 2% above.
The end of the hire is where scheme calculators go quiet. HMRC's simplified valuation table sets the market value you pay to own the bike: 25% of the original price after one year (18% under £500), 7% after four years (3% under £500). The tool adds that fee to the net cost, or leaves it out if you hand the bike back, and shows all three routes together.
Two checks are built in. Your pay after the deduction must stay above the National Living Wage of £12.71 an hour, or the employer cannot run the sacrifice at that size. And if your employer passes on part of its 15% employer National Insurance saving, the deduction shrinks accordingly, as Cyclescheme's own calculator notes.
Savings on a £1,500 bike by salary
England, Wales and Northern Ireland, no employer pass-through. The four year route against buying after 12 months.
| Salary | Tax and NI saved | Own after 4 years | Own after 12 months |
|---|---|---|---|
| £25,000 | £420 | £1,185 (21% saved) | £1,455 (3% saved) |
| £35,000 | £420 | £1,185 (21% saved) | £1,455 (3% saved) |
| £45,000 | £420 | £1,185 (21% saved) | £1,455 (3% saved) |
| £60,000 | £630 | £975 (35% saved) | £1,245 (17% saved) |
| £90,000 | £630 | £975 (35% saved) | £1,245 (17% saved) |
| £130,000 | £705 | £900 (40% saved) | £1,170 (22% saved) |
The bike arrives. Then it needs looking after.
A scheme bike is ridden to work every day, in London weather, and locked outside for hours. Cables stretch, pads wear and chains need replacing within the first year of that kind of use, and a bike you are still paying for is worth keeping on top of.
A mechanic can come to your home or office for a full service or an individual repair, and breakdown cover from £19.99 a month includes a monthly check.
Cycle to Work questions, answered
Where the numbers come from
- GOV.UK, Income Tax rates and Personal Allowances 2026 to 2027 bands for England, Wales and Northern Ireland and the allowance taper.
- GOV.UK, Income Tax in Scotland Scottish bands for 2026 to 2027.
- GOV.UK, National Insurance rates and categories Employee rates of 8% and 2% and the thresholds.
- HMRC, EIM21667A simplified valuation of cycles sold to employees The ownership fee table by age and original price.
- GOV.UK, Cycle to Work scheme implementation guidance Scheme conditions and the 2019 change on packages above £1,000.
- GOV.UK, National Minimum Wage and National Living Wage rates £12.71 an hour for 21 and over from April 2026.
- Cyclescheme, savings calculator How a provider calculates the saving, including the employer NI pass-through.
New bike on the way? Book its first service now.
Full services and repairs at your door across London, 9am to midnight, seven days a week.