Salary sacrifice cycle to work scheme

What is the cycle to work salary sacrifice scheme?

The Cycle to Work Salary Sacrifice Scheme, often facilitated through a cyclescheme, is a government-backed initiative designed to help employees save money on a bike and cycling accessories by paying through their pre-tax salary. This scheme allows employees to lease a bike from their employer, with payments deducted from their gross salary before tax and National Insurance contributions. As a result, employees can make significant savings while promoting a healthier, more sustainable commute.

The scheme applies to both standard bicycles and e-bikes, making it accessible to a wide range of commuters. Employers benefit too, as they can reduce their National Insurance contributions and encourage an active workforce. By participating in the cycle to work salary sacrifice scheme, both employees and businesses can contribute to reducing carbon emissions and congestion while making cycling a more affordable commuting option.

How the cycle to work salary sacrifice scheme works

The cycle to work salary sacrifice scheme operates through a simple and efficient process. First, an employer must be registered with a cycle-to-work provider. Employees can then select a bike and necessary accessories, such as helmets, locks, and lights, within the scheme’s budget limits.

The employer purchases the bike on behalf of the employee, who then agrees to salary deductions over a fixed hire period—typically 12 to 18 months. These deductions come from the employee’s pre-tax salary, reducing their overall taxable income and providing tax savings.

At the end of the agreement, employees may have the option to purchase the bike at a fair market value, extend the lease, or return it, allowing them to own it later. The scheme is flexible and encourages employees to adopt a greener and more cost-effective mode of commuting while benefiting from financial savings.

Benefits of salary sacrifice cycle to work scheme

For Employees:

• Significant savings on bikes and cycling accessories through tax benefits.
  
  

• Improved physical and mental health by incorporating cycling into daily routines.
  
  

• A cost-effective commuting solution that reduces reliance on public transport or fuel.
  
  

• Access to a range of bikes, including e-bikes, making cycling more accessible.
  
  

• Flexible ownership options at the end of the lease period.
  
  

For Employers:

• Reduction in National Insurance contributions, leading to financial savings.
  
  

• Encourages a healthier, more productive workforce with reduced absenteeism.
  
  

• Enhances corporate social responsibility by supporting eco-friendly commuting.
  
  

• Boosts employee satisfaction and retention through valuable workplace benefits.
  
  

• Demonstrates commitment to sustainability and green initiatives.

Understanding tax savings in the cycle to work salary sacrifice scheme

One of the key advantages of the Cyclescheme cycle to work initiative is the tax savings it provides for both employees and employers. Employees pay for their bike using their pre-tax salary, which means they save on both income tax and National Insurance contributions. The amount saved depends on their tax bracket, with higher-rate taxpayers benefiting the most.


For employers, the scheme also reduces their overall National Insurance contributions, making it a cost-effective benefit to offer staff. Additionally, as employees switch to cycling, they may reduce their reliance on company-provided parking or fuel expenses, further lowering business costs. This financial incentive makes the scheme an attractive option for companies looking to support their employees while promoting a sustainable and healthier workplace culture.

Professional salary sacrifice implementation

At Pulse Accountants, we provide a comprehensive service to help businesses implement and manage salary sacrifice schemes efficiently and compliantly.

What We Offer:

• Expert Consultation – We assess your business needs and help design a salary sacrifice scheme tailored to your workforce.
  
  
• Scheme Implementation – We manage the setup process, ensuring compliance with HMRC regulations.
  
  
• Employee Communication – We provide clear, professional communication to employees, ensuring they understand how salary sacrifice works and the benefits it offers.
  
  
• Ongoing Support – Our team is available to answer queries and provide ongoing administrative support.
  
  

Pricing

• Cost: Varies on a case-by-case basis. Based on company size and employees. Contact us to get a quote.
  
  
• Transparent Communication: We communicate the scheme benefits directly to employees and provide full support for any questions.
  
  
• Flexible Payment Options: Our fee is spread over several months, so your business benefits from cost savings immediately.

Why choose Pulse?

With extensive experience in cyclescheme and cycle to work salary sacrifice schemes, we provide businesses with a seamless and fully compliant salary sacrifice solution. Our team ensures that both employers and employees understand the benefits and make the most of their opportunities.

Key Reasons to Work With Us:

✔ Industry Expertise – We have a deep understanding of salary sacrifice regulations.

✔ Tailored Solutions – We design bespoke schemes that align with your business and workforce needs.

✔ Compliance Assurance – We ensure full adherence to HMRC guidelines and workplace rules.

✔ Dedicated Support – Our team is available to provide ongoing assistance and ensure smooth implementation.