As a business owner, participation in a cycle to work scheme may not necessarily be on your list of priorities, but there are many advantages for both employers and their employees in getting involved. Improved physical and mental well-being, boosted sustainability, National Insurance savings, and greater staff retention, are just some of the benefits of a Cycle to Work Scheme. Find out why your company really needs to offer this employee benefit.
What is the Cycle to work Scheme?
As a UK government initiative, the Cycle to Work Scheme aims to boost levels of active travel by encouraging employees to use a cycle to get to work rather than driving or taking public transport. Employers effectively purchase the bike (plus any cycling accessories) and the employee makes a monthly salary sacrifice to hire the cycle over an agreed period (usually 12 months).
After this hire period ends, the employee has three options:
- Option 1: extend the hire agreement – a typical option is to extend for 3 years (with no further monthly repayments required) after which the employee takes ownership of the cycle.
- Option 2: return the cycle and equipment – the employee will not have to make any further payments but the salary sacrifice contributions will not be returned.
- Option 3: pay an ownership fee for the cycle under a separate agreement – the fee will be based on the current market value (based on a % of the original price).
For the employee, they have the benefit of access to a brand new bike with a cost saving of 42%, due to tax and National insurance savings of what is classed as a salary sacrifice employee benefit.
What are the benefits to employers of the Cycle to Work Scheme?
First and foremost, employers should want to get involved in the Cycle to Work Scheme, not because of what it does for them, but rather what it delivers for their employees. A benefit such as this that you are able to offer to your employees will be seen as a positive and help with attracting new employees and retaining existing ones.
That said, there are still many other benefits to employers that make participation in a Cycle to Work Scheme a must-do for most employers. These include:
Improved Employee Health & Performance
A healthy and happier workforce is a more productive one. Those who cycle to work get all the benefits of a good workout (twice daily) and this helps boost physical and mental health. For the employer this means a much more active and energised workforce who are likely to be more productive and less prone to being absent from work due to illness (in part because they may no longer be sharing germs on public transport).
Boosts Employee Morale and Retention
A staff benefit like Cycle to Work can boost existing employee morale and help with retention. If your business is seen as one that promotes staff wellbeing, this can also give you an advantage when it comes to attracting new talent to your company.
Positive Company Image
Introducing a cycling scheme demonstrates a commitment to sustainability and this can enhance your company’s reputation. The more employees who get involved, the greater the reduction in your company’s carbon footprint and contribution to your Corporate Social Responsibility.
Reduced National Insurance Contributions
Not only are employers able to recover the full cost of the bike through the salary sacrifice, they can also save on National Insurance contributions when employees participate in the scheme. This can amount to 15% of the value of the bike (and any accessories) in National Insurance Contribution Savings. Previously the saving would have been 13.8% but the amount employers pay towards employees’ NIC increased from April 2025.
| Example hire value | Employers’ NIC Saving (15%) |
| £500 | £75 |
| £750 | £112.50 |
| £1,000 | £150 |
| £1,500 | £225 |
Example of the Employers’ NIC savings based on bike hire value
No Cost To Employers
There are a number of Cycle to Work Scheme providers including Cyclescheme, Halfords Cycle2Work, Cycle Solutions, Green Commute Initiative, Pluxee UK, Evans Cycles’ Ride to Work, and Bike2Work Scheme. These are free to join. While employers do cover the initial cost of the bike, this is repaid through the salary sacrifice arrangement.
All these benefits add up to a very compelling case for business owners to get signed up for the Cycle to Work Scheme, but are there any drawbacks? Below we outline some of the potential cons for business owners to be aware of:
Set up process
As an employer, It’s likely that you’ve heard of the Cycle to Work Scheme but haven’t pursued it because your company has been too busy, or you’ve underestimated how simple it is to get involved. With multiple different providers, it is really easy to get signed up and then your chosen provider will handle most of the work involved, including communicating with the employee all through the process of securing a cycle.
Getting staff involved
The success of your cycle scheme rests on your employees actually getting involved. Not everyone lives a reasonable distance where they could commute regularly, while others may lack the will to do so or even be a little afraid of the roads. Your scheme provider will usually provide marketing materials that you can use to promote the benefits to your employees and convince them to get involved.
Bike Storage
One consideration for employers is the availability (or lack of) bike storage at their premises. You may have to consider having some bike racks or lockers installed and have these located somewhere where they are in view or in range of your own CCTV or monitoring equipment. Alternatively, a spare room or space within your premises set aside for bikes might be a good option. Employees won’t be keen if you don’t provide them with a suitable and secure location for their bikes.
Shower facilities
Another practicality to give due consideration is the availability of facilities for staff to take a shower or freshen up when they get to their workplace. Anyone undertaking a decent size commute of at least a few miles is likely to arrive in need of a good freshen up if they are not to get up the noses of their work colleagues.
Upfront Funding of Bikes
For some employers the upfront costs of funding the cycles, especially if they are anticipating a high take-up by multiple employees, may be a concern. The good news is that there are many scheme providers who have systems in place whereby businesses are only obliged to pay for the cycles when the salary sacrifice payments start to come in.
Employees Leaving
If an employee and scheme participant leaves the business, employers may be wondering where this leaves them in terms of the scheme. Thankfully, there is no risk to the business whatsoever, as the remaining balance is deducted from their final net salary.
Any other consideration for employers to be aware of?
The Cycle to Work Scheme is highly beneficial to both employers and their employees and there aren’t any major reasons not to offer it. Employers do have to make sure that the salary sacrifice deductions do not cause an employee’s pay to fall below the National Minimum Wage.
The scheme can be used not only for cycles, but also for e-bikes, and this might be a way to get people to re-enage with cycling that might currently lack the fitness or motivation for an active commute. In some instances, handcycles, adapted bikes or tricycles could be included in a scheme (depending on the voucher limits set) so this could even open up the scheme to those with different needs.
Next steps – Your Business Joining the Cycle to Work Scheme
To join the Cycle to Work scheme, you’ll need to register your business with a scheme provider and provide them with a few details including your company details and contact information. You’ll need to set your scheme parameters including the maximum spend for employees (if you wish to add one) and scheme duration.
There are plenty of providers and these will work with certain bike stores who will be willing to redeem your employees’ bike voucher that they receive, so choose one that will provide the best options for your staff.
Once you’ve been accepted on the scheme, you then need to promote it to your employees who then apply through the scheme provider. Your company will be required to pay for the cycle and accessories and then recover this through the salary sacrifice.
