Discover how Cyclescheme helps UK employers cut costs, save tax, and boost staff wellbeing through a free, simple-to-run salary sacrifice benefit.
How Cyclescheme can drive cost savings and tax benefits
If you're an employer looking for a smarter way to offer staff benefits without increasing your overheads, Cyclescheme could be the solution. The Cycle to Work salary sacrifice scheme is a government initiative that allows employees to save money on cycling gear, while creating substantial savings for your business thanks to reduced employer National Insurance Contributions (NICs).
But it’s not just tax benefits that drive cost savings. There are wider financial gains to be made from the healthier and more productive employees you’ll have as a result of increased cycling.
In this blog, we’ll explore all of the ways that Cyclescheme can financially benefit your business, starting with a reminder of how the scheme works tax efficiently, and then looking at the statistics associated with a physically and mentally supported workforce.
What is Cyclescheme and how does it work for employers?
Cyclescheme is the UK’s leading Cycle to Work provider, offering a simple, government-approved way for employees to access brand-new bikes, electric bikes and cycling accessories, such as bike locks and cycle helmets, tax-free.
The scheme works through salary sacrifice, where the total value of an employee’s chosen bike and accessories is deducted from their gross salary in monthly instalments. Because the deduction is made before income tax and NI, employees save up to 47% on the cost of the cycling equipment, and employers save up to 15% in employer NICs on the amount sacrificed.
One of the biggest advantages of Cyclescheme is how easy it is to implement, regardless of your business size or sector. There are no setup costs, no subscription fees, and no hidden charges. It’s completely free for employers to run.
The digital-first system is designed to integrate smoothly with your existing payroll processes, and the employer benefits portal gives you real-time oversight with minimal admin.
Register your business for Cyclescheme today >
Direct cost savings: How salary sacrifice reduces employer NI contributions
One of the most obvious financial benefits of Cyclescheme is the reduction in employer National Insurance contributions. For employers, that means real, tangible savings of up to 15% on the value of each employee’s salary sacrifice. This is because when an employee sacrifices a portion of their gross salary to pay for a bike and accessories, it literally reduces the amount of salary that’s subject to tax and NI.
With no upper limit on how many staff can participate, the savings soon start to add up to a healthy figure. Our data shows that the average NICs saving is £150 per £1,000 processed via the scheme.
Healthier, happier employees = lower absenteeism and improved productivity
Encouraging your team to commute by bike supports a healthier, happier workforce. And that can translate into major financial savings for your business.
Cycling is proven to boost cardiovascular health, reduce stress, and positively impact mental wellbeing. According to a recent study, cycling to work links to a 12% lower risk of employees taking sick days, helping to reduce the staggering £103 billion annual cost of absenteeism to UK businesses.
It’s not just about fewer days off. Our case studies show that physically active employees are more alert, more energised, and more productive during the workday. By supporting cycling through Cyclescheme, you’re investing in employee wellness and protecting your business from the hidden costs of burnout and long-term illness.
Read the Cyclescheme x Able & Cole case study >
Enhancing employee engagement without increasing salaries
In a cost-conscious business, offering meaningful employee benefits without increasing salaries is a strategic advantage. As a leading scheme provider, Cyclescheme helps you do exactly that by delivering one of the UK's widest range of bikes and accessories with plenty of big-name bike brands that offer everything from electric mountain bikes to safety gear.
Employees can choose the cycling equipment that suits them and pay a significantly reduced cost without any additional outlay from your business. This monetary saving supports vital financial wellness initiatives, whilst enhancing the sense of being valued and appreciated at work.
As a BHN Extras blog recently highlighted, 31% of employees who feel supported in their health and wellbeing are more productive at work. Cyclescheme taps into this need by promoting financial, physical and mental wellness in a way that feels personal and practical.
Supporting your ESG goals through active travel
Environmental, Social and Governance (ESG) performance is a growing priority for stakeholders, investors and employees alike. And now, with new legislation looming, failure to comply with ESG reporting requirements could lead to hefty fines and reputational damage.
Fortunately, running a Cycle to Work scheme is a simple way to enhance your ESG credentials while keeping costs low. Cyclescheme meets criteria for all three ESG pillars, by helping to reduce your carbon footprint, supporting long term employee wellbeing and inclusion, and demonstrating sustainable and responsible business practices.
Read more about Cyclescheme and ESG >
A smart, simple way to save money while doing good
Cyclescheme isn’t just a tick-box employee benefit. It’s a cost-saving, wellbeing-boosting, ESG-enhancing asset for your business that delivers real returns through National Insurance savings and in-direct cost savings via a healthier, more engaged workforce.
With zero setup fees, minimal admin and even a range of free marketing support materials, it saves you both time and money, while providing a fully compliant and sustainable approach to an employee benefit that’s already offered by over 50,000 UK employers.
Register your business for Cyclescheme today >
Frequently asked questions about Cyclescheme’s cost savings
How much can I save as an employer using Cyclescheme?
You can save up to 15% in employer National Insurance contributions for every employee who joins the salary sacrifice scheme. The total amount you’ll save depends on how many employees participate and the value of their selected cycle to work package. On average, most employers save £150 per £1,000 processed through the scheme.
How does salary sacrifice impact my business taxes?
Salary sacrifice reduces the gross salary paid to employees, which in turn lowers your employer NI liability. This results in direct tax relief for your business.
Learn more about how salary sacrifice schemes work >
Do I have to pay anything to use Cyclescheme?
No. Cyclescheme is completely free for employers to facilitate. There are no setup charges, no subscription fees, and no hidden costs. The scheme itself is cost-neutral to run with all equipment costs reclaimed directly from your employees’ pre-tax salaries.
Can small businesses use the scheme?
Yes. Providing you employ one or more members of staff who are paid via PAYE, you can register with Cyclescheme. Unfortunately, the Cycle to Work scheme is not open to those who self-assess their own tax returns.
How does Cyclescheme help with staff wellbeing?
Many studies online show that cycling improves both mental and physical wellness. Staff who cycle to work are more likely to be energised, productive, and less prone to illness. In fact, research conducted by Cyclescheme found that 82% of participants said they felt less stressed after cycle commuting.
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