Cyclescheme is a way to pay for your new bike through a monthly salary sacrifice.The payments are taken directly from your gross salary which means you don’t pay any interest fees and you reduce the amount of Income Tax and National Insurance you pay. 

Cycle to work operates as a 'salary sacrifice' employee benefit. This means that you agree to give up part of your salary in exchange for a benefit – in this instance the benefit is a bike and/or accessories. The salary sacrifice is taken from your gross salary (before tax) which means that you will pay less Income Tax and National insurance.

The cycle to work scheme does not necessarily have a limit. This is to ensure riders can get the exact bike they need to improve their commute, for example:
you may need an e-bike to beat the hills or arrive at work sweat-free, or
you might need a hard-wearing bike with a titanium frame to support you cycling 365 or
you might need a specialist bike that suits your body type or any disabilities you have.

Employers have increasingly offered schemes without limits but it's not universal. Employers have to consider their cash flow and their employees' eligibility to join the scheme. It's important that we note that employers are under no obligation to offer schemes with a limit in excess of £1,000.

The saving is achieved by paying for the bike and/or accessories directly from your gross salary (before tax). This means your income tax and national insurance are based on your salary less the cost of the bike and/or accessories. This means that your income tax and national insurance are calculated on the reduced amount of salary. Hence, the amount of tax and national insurance you pay is less.

Normally, when you get a bike the process looks like this:

1. You earn your money
2. You pay your tax
3. You choose your bike and buy it

When you get a bike via salary sacrifice the process looks like this:

1. You earn your money
2. You choose your bike and pay for it
3. You pay your tax