Ali Fitzsimons
It’s one of the most popular benefits an organisation can offer its employees: a Cycle to Work scheme helps your team get fit, save money on their commute, and potentially pick up a great new hobby. So how does a Cycle to Work scheme work? And how can you start one up? We’ll explain it all.
What is a Cycle to Work scheme?
A Cycle to Work scheme is an employee benefit that works as a salary sacrifice scheme. It helps employees buy a new bicycle but pay it off in monthly instalments that are taken from their salary. Think of it as the employer buying a bike for the employee, who then ‘hires’ the bike while paying them back for it over a set number of months.
How does the Cycle to Work scheme work?
A Cycle to Work scheme set up by an employer will have a minimum repayment term (or hire period) of 12 months, meaning that the employee must be given at least 12 months of salary sacrifice in order to pay for the bike. Different organisations will have different rules, but some employers will offer 24 or even 36-month repayment terms, giving employees more time to pay for the bike.
One of the best benefits of a Cycle to Work scheme is that it saves employees money on tax. The monthly repayments are taken from your pre-tax salary, saving employees money as they’ll be paying less national insurance on their earnings. They’ll essentially be able to buy a bike without paying tax on it!
What kinds of bikes and accessories can be bought with the Cycle to Work scheme?
The Cycle to Work scheme can help your employees get their hands on any kind of bike that they could use for their commute. This includes road bikes, mountain bikes, hybrid bicycles and e-bikes.
Employees can also use the scheme to get bike-specific accessories, such as mudguards, helmets, locks and bike lights.
It’s also important to note that Cycle to Work schemes are intended to get more people commuting to and from work via bicycle.
Therefore any employee using the Cycle to Work scheme will agree that at least 50% of the bike use will be towards ‘qualifying journeys’, which basically means commuting to and from work.
What is not included in the Cycle to Work scheme?
A few items can’t be purchased through a Cycle to Work scheme. This includes cameras, car bike racks, GPS devices, bike rollers and any food or nutritional items that are sold in bike shops. You also can’t buy children’s bikes on the Cycle to Work scheme as anything purchased through the scheme has to aid an employee in their commute to work.
How can employees buy a bike with a Cycle to Work scheme?
After the Cycle to Work scheme has been set up by the organisation, employees can now start the process of getting their new bike, and it’s very simple!
All they have to do is find the bicycle they want and apply through their Cycle to Work scheme portal, which their employer then reviews and determines whether or not the bike and accessories they want to buy are eligible.
If everything looks OK, the employee will receive their bike and start paying it off via instalments taken from their monthly pay package.
What happens at the end of a Cycle to Work scheme?
At the end of the agreed repayment period, a few different things can happen.
The best-case scenario is that the employee has paid their employer back for their bike or accessories in full, meaning they now own the bike and can do whatever they want with it.
If they haven’t been able to pay their employer back for the bike, the employee will have to either return the bike, or enter a new agreement with their employee about a further salary sacrifice scheme.
What different Cycle to Work schemes are available?
There are a few different Cycle to Work schemes available for UK employers. Each one differs slightly, mainly in the types of bikes and accessories that are available through them. It’s worth doing a bit of research and speaking to your team to decide which scheme would be best for them and get the most uptake. You should also look into which scheme is the easiest to use, both for the employer and employees. If a scheme offers great discounts but is hard to navigate, it might put your staff off from using it.
Some of the most popular schemes include:
What are the benefits of a Cycle to Work scheme for employers?
A Cycle to Work scheme can bring in huge benefits to employers. There’s the obvious benefit of helping your staff buy their own bicycle while saving money on tax and avoiding a huge one-off payment. But there are far more reasons to start up your own Cycle to Work scheme.
By helping your staff own their own bike you’ll boost employee wellbeing and morale. Bikes can be expensive and out of reach for some people, so your scheme could be helping employees make a purchase that wouldn’t have been possible before.
You’ll also be fostering a culture of healthy living and fitness in your organisation. Getting on two wheels, even if it’s only for a commute twice a day, can help people start their exercise journey and will in turn help them feel more productive and engaged at work.
Of course a Cycle to Work scheme is a fantastic benefit that could also help you attract and retain top talent. A study found that 49% of UK consumers are unable to afford a bike outright, so by giving employees this access to a new bicycle, you’re putting your organisation at a huge advantage when looking for new hires.
Get started with Reward Gateway | Edenred’s Cycle to Work scheme
Reward Gateway | Edenred’s Cycle to Work scheme benefits from our deep knowledge of salary sacrifice schemes and employee perks platforms. We make the process easy, quick, and straightforward. Book your free demo today and see how you can get your employees on two wheels.
Learn more about our CTW scheme and what it can do for your organisation and your people by speaking with one of our employee experience experts.
