Cycle to Work Scheme Calculator
Enter the bike (and equipment) price plus your salary — see exactly how much tax and National Insurance you save and what the bike really costs you.
How it works
Cycle to Work is salary sacrifice: your gross pay is reduced by the bike's hire value, and because that slice never becomes taxable earnings, you save income tax AND employee National Insurance on it (ITEPA 2003 s.244 exemption). The calculator computes your saving exactly by running the full 2026/27 tax and NI computation on your salary with and without the sacrifice — not the outdated flat "32%/42%" figures still quoted from 2019 guidance.
With 2026/27 rates the typical saving is about 28% for basic-rate taxpayers (20% tax + 8% NI) and 42% for higher-rate (40% + 2%) — a £1,500 bike really costs a basic-rate earner about £1,080. Employers save employer NI too, and some pass that on as an extra discount.
The £1,000 "limit" myth: there is NO cap when the scheme is run by an FCA-authorised provider (Cyclescheme, Halfords etc. — most big schemes are); the £1,000 cap only binds employers relying on the consumer-credit exemption without FCA authorisation. HONEST NOTES: technically you HIRE the bike during the scheme and ownership transfers later via a small end-of-term payment; the sacrifice can't take you below minimum wage; and savings shrink if the sacrifice drops you below thresholds that matter to you (pension contributions, statutory pay calculations).
FAQ
How much do I actually save with Cycle to Work?
Your marginal tax + NI rate on the sacrificed amount: at 2026/27 rates roughly 28% for basic-rate (20% + 8% NI) and 42% for higher-rate (40% + 2% NI) taxpayers. On a £2,000 e-bike a higher-rate earner saves about £840, paying ~£1,160 spread over 12-18 monthly salary deductions. This calculator runs your exact figures, so threshold-crossers (e.g. £50,270) get the correct blended saving rather than a flat percentage.
Is there really no £1,000 limit any more?
The limit depends on WHO runs the scheme: employers using the standard consumer-hire exemption are capped at £1,000 of goods; schemes run by an FCA-authorised provider have NO cap — and the major providers (Cyclescheme, Vivup, Halfords Cycle2Work) are FCA-authorised, which is why e-bikes over £1,000 are routinely available. Ask your HR which route your scheme uses. The 2019 DfT guidance remains the governing document and spells out both routes.
Who owns the bike, and what is the end-of-scheme payment?
During the scheme your employer (or the provider) owns the bike — you hire it; building a purchase option into the hire agreement would void the tax exemption. At the end, providers typically offer transfer of ownership for a small fee based on HMRC's valuation table, or an extended free-of-charge hire that lets the value taper to negligible (the common "own it after 4-6 years for ~3-7%" route). If you leave your job mid-scheme, the outstanding balance is usually deducted from net pay — you lose the remaining tax advantage.