Cycle To Work Savings Calculator
Calculate your true savings with the UK Cycle to Work scheme. Estimate income tax and National Insurance deductions to find the net cost of your new bike.
Bike & Salary Details
Enter your bike cost, tax band, and scheme duration to calculate your true savings
The total retail price of the bike and any accessories.
Standard schemes are usually 12 to 18 months.
Enter 20 for Basic, 40 for Higher, or 45 for Additional rate.
Currently 8% for most employees (2024/25 tax year).
Fee to own the bike at the end of the scheme (typically 3% – 7%).
Enter 0 if your employer keeps their NI savings. Enter 13.8 if they pass it to you.
Savings Estimates
Projected tax savings and true net cost of your bike
Enter your bike cost, tax band, and scheme details above, then click Calculate Savings to see your true discount.
UK Tax Bands & Scheme Limits
Understanding your tax band and the rules of the Cycle to Work scheme helps you maximise your savings on a new bike or e-bike.
| Tax Band / Rule | Rate / Limit | Context / Details |
|---|---|---|
| Basic Rate Tax | 20% | Applied to earnings between £12,571 and £50,270. |
| Higher Rate Tax | 40% | Applied to earnings between £50,271 and £125,140. |
| Additional Rate Tax | 45% | Applied to earnings over £125,140. |
| Employee NI Rate | 8% | Standard rate for 2024/25 on earnings £12,571 – £50,270. |
| Scheme Spending Limit | No Limit | Most major providers removed the £1,000 cap in 2019. |
Cycle To Work Scheme FAQ
Everything you need to know about the UK Cycle to Work scheme, salary sacrifice, and tax savings.
The Cycle to Work scheme uses a ‘salary sacrifice’ arrangement. You agree to give up a portion of your gross salary in exchange for a bike and equipment. Because this deduction is taken before Income Tax and National Insurance (NI) are calculated, you pay less tax and NI overall. This effectively reduces the true cost of the bike by 20% to 40% depending on your tax bracket.
Historically, there was a £1,000 limit set by the original government scheme. However, since 2019, most major scheme providers (like Cyclescheme, Greenfile, and Halfords) have removed this cap entirely. This means you can now use the scheme to purchase high-end road bikes or expensive e-bikes without an upper spending limit, provided your employer agrees.
At the end of your hire period (usually 12 to 18 months), you don’t automatically own the bike. You must pay a ‘Fair Market Value’ (FMV) fee to transfer ownership. Depending on the scheme provider and the length of your hire, this fee is typically between 3% and 7% of the bike’s original value. Our calculator includes this FMV fee to give you the true total cost.
Yes, absolutely! The scheme covers not just bicycles but also cycling equipment and accessories, including electric bikes (e-bikes), helmets, lights, locks, and panniers. Because e-bikes can be expensive, the removal of the £1,000 cap has made the scheme incredibly popular for electric bicycle purchases.
Yes, the Cycle to Work scheme is a UK government tax exemption initiative. To participate, you must be a UK employee (PAYE), be earning at least the National Minimum Wage, and your employer must be signed up to a recognised Cycle to Work scheme provider. Self-employed individuals or company directors cannot currently use the scheme.