With National Bike Week just around the corner from 8 – 14 June 2026, there has never been a better moment for employers to look at one of the most underused staff benefits in the UK.
Every year, this celebration of cycling calls on people to jump back on their bikes because, as they say, you never forget how to do it once you have learned.
Whilst the true enthusiasts won’t need much convincing, for most businesses this event passes with little or no action being taken – bar a quick LinkedIn post.
However, for those who take action, it is an opportunity to launch or promote a genuinely valuable staff benefit that costs the employer very little, reduces payroll costs and gives employees savings they will actually notice.
The Cycle to Work scheme has been running since 1999 and is backed by the UK Government.
Despite that, awareness among both employers and employees remains surprisingly low. If your business does not currently offer it, now might be a good time to change that.
What is the Cycle to Work scheme?
Cycle to Work is a salary sacrifice arrangement. Your business buys a bicycle and cycling equipment and the employee repays the cost through monthly deductions taken directly from their gross salary, before Income Tax and National Insurance are applied.
The scheme covers a wide range of cycling equipment, not just the bike itself, so staff can save on helmets and lights, reflective clothing, panniers and bags, child safety seats, locks, mudguards and helmets.
However, some items are not eligible, including GPS devices, cameras and car bike racks.
As the repayments reduce taxable income, both the employer and employee reduce their tax and National Insurance liabilities.
The maximum saving depends on the employee’s tax band, but it can be substantial, with basic rate taxpayers typically saving between 30-39 per cent, while higher rate taxpayers typically save between 40-47 per cent.
In fact, a higher-rate taxpayer buying a £1,000 e-bike through the scheme could pay as little as £530 for it.
Nothing is paid upfront and the cost is spread across 12 to 18 monthly instalments, which most employees barely notice in their take-home pay.
Beyond the immediate financial rewards, the scheme also helps to improve employee wellbeing and can help contribute to your businesses net-zero plans.
The employer benefit: Lower NIC contributions
The scheme is not just good for employees, as salary sacrifice reduces the gross salary on which National Insurance Contributions are calculated.
The savings are typically around 15 per cent of whatever amount is sacrificed. For a business with several employees using the scheme, that is a meaningful reduction in payroll costs.
Salary sacrifice arrangements are generally straightforward, but there are a few areas where businesses need to take care.
For example, the scheme must be properly documented in the employee’s contract and it cannot reduce an employee’s cash earnings below the National Living Wage or National Minimum Wage.
The equipment hired to the employee is exempt from Benefit in Kind tax, provided it is used at least partly for qualifying commutes between home and work and not exclusively for leisure.
If you are considering offering the scheme for the first time, or reviewing an existing arrangement, it is worth taking a few minutes to confirm the structure is correct with your accountant before you offer it to staff.
How the Cycle to Work process works
First, choose a scheme provider, such as Cycle scheme, Halfords Cycle2Work or Cycle Solutions – other providers exist across the UK.
Each has slightly different retailer networks and administration processes, so you need to weigh up your options.
When you are happy with your choice, register with the scheme and the provider will handle the consumer credit and administration framework.
The employee then selects their equipment, shopping at a partnered retailer or independent bike shop before submitting a request to the provider.
Once the employer approves the certificate, the employee receives a voucher to exchange for the bike and gear.
Salary sacrifice then begins, with monthly deductions taken from gross pay over the agreed hire period.
At the end of the hire period, the bike technically belongs to the employer until the arrangement concludes.
Employees can then keep the bike by paying a small fair market value fee set by HMRC or extend the lease.
National Bike Week: the timing is right
National Bike Week runs from 8 to 14 June 2026 and is the UK’s largest annual cycling celebration. It is an ideal moment to introduce the scheme to employees, since cycling is already on their radar. A well-timed internal communication during the week, paired with signposting to a savings calculator, can drive engagement far higher than a cold launch at any other point in the year.
If you already offer the scheme, this week is an excellent moment to remind staff it exists. Uptake on these benefits is consistently lower than it should be simply because employees have forgotten the option is available.
Getting started
National Bike Week offers an ideal moment to introduce the scheme to employees, since cycling is already on their radar.
From a tax and payroll perspective, the scheme’s setup is not complex, but it does require a small amount of care to ensure the salary sacrifice arrangement is correctly documented and that it does not inadvertently cause any National Minimum Wage issues.
If you would like guidance or support on any forms of salary sacrifice, please speak to our team.
