Cycle To Work Scheme Calculator
Calculate your tax savings on a new bike or e-bike. Estimate how much you can keep in your pocket through the UK’s Cycle to Work salary sacrifice scheme.
Bike & Scheme Details
Enter your bike cost and tax details to calculate your savings
Total cost of the bike, e-bike, and any approved accessories.
Your marginal Income Tax band determines your tax savings.
Most schemes run for 12 months, but some employers offer longer terms.
Some employers pass their National Insurance savings to you as an extra discount.
Scheme Savings Breakdown
See your estimated tax savings and net cost
Enter your bike cost and tax details above, then click Calculate Savings to see your Cycle to Work savings.
UK Tax Bands & Cycle to Work Savings Rates
Your savings depend entirely on your marginal tax rate. The higher your tax band, the more you save through salary sacrifice.
| Tax Band | Income Tax Rate | Employee NI Rate | Typical Total Savings |
|---|---|---|---|
| Basic Rate | 20% | 8% | Up to 28% |
| Higher Rate | 40% | 2% | Up to 42% |
| Additional Rate | 45% | 2% | Up to 47% |
| Scottish Basic | 21% | 8% | Up to 29% |
| Scottish Higher | 42% | 2% | Up to 44% |
Cycle To Work Scheme FAQ
Everything you need to know about the UK Cycle to Work scheme, from eligibility to what happens when the salary sacrifice period ends.
The Cycle to Work scheme is a government-backed initiative that allows UK employees to save money on a new bike and equipment through a salary sacrifice arrangement. You agree to give up a portion of your gross salary in exchange for a bike, which reduces your taxable income. This means you pay less Income Tax and National Insurance, effectively giving you a discount of 25% to 40% on the bike’s retail price.
Historically, the scheme was capped at £1,000. However, in 2019, the government removed the upper limit for the tax exemption. Many employers have now removed the cap entirely, allowing you to spend as much as you like. Some employers still choose to keep a limit (often between £1,000 and £5,000), so you must check your specific company’s policy.
At the end of the salary sacrifice period (usually 12 to 18 months), the bike legally belongs to the employer or the scheme provider. To own it, you must pay a ‘Fair Market Value’ (FMV) fee. Under HMRC rules, if you paid 100% of the bike’s cost through salary sacrifice, the FMV is usually just 3% to 7% of the original value, depending on the scheme’s length. Many providers offer a ‘name your price’ option where you can pay a small fee (e.g., £10) to transfer ownership.
Yes, the scheme is not limited to just bicycles. You can use it for e-bikes, folding bikes, cycling clothing, helmets, lights, locks, and even turbo trainers, as long as they are primarily for commuting (at least 50% of the time). Some employers have specific lists of approved items.
If you choose to own the bike at the end of the scheme, you may have to pay a small fee based on HMRC’s Fair Market Value (FMV) scale. However, this fee is typically very low (often between 3% and 7% of the bike’s original value) and is paid out of your post-tax income. Some scheme providers now offer an option to pay a nominal fee (like £10) to transfer ownership after 12 months.
Yes, as long as you meet the basic eligibility criteria, you can use the scheme. You must be an employee (not self-employed), have been with your employer for at least 3 to 6 months (depending on the provider), and your remaining salary after the sacrifice must be above the National Minimum Wage. Zero-hour and part-time workers are eligible if they meet these conditions.