Cycle to Work scheme: An employer’s guide

Blogs 11 Aug 2020

Encourage your employees to get active and stay safe with the cycle to work scheme. Learn what it involves, the benefits of offering it and how you can make the most of it.

Commuters and shoppers transport habits will never return to pre-COVID-19 normality, according to new research reported by First Voice – with public transport usage facing a massive drop.

If your small business doesn’t offer the Cycle to Work scheme, now is a great opportunity to support your staff to stay safe on their commute, whilst also getting active.

What is the Cycle to Work scheme?

The scheme is a ‘salary sacrifice scheme’ – when the employee agrees to exchange part of their salary for a non-cash benefit (in this case a bicycle) before tax and national insurance is applied. It was introduced to encourage healthy living and reduce pollution.

What are the benefits?

  • Saving on National Insurance Contributions for employer of up to 13.8 per cent
  • Supports health and wellbeing of employees, which in turn can reduce costs associated with sickness and absence and increase productivity
  • Contributes to business corporate and social responsibility by promoting an environmentally friendly form of transport
  • Employees save 25-39 per cent on the cost of a bike and accessories, plus spread the payments over time

Who can join?

Any employer, of any size, across the public, private and voluntary sectors can run a Cycle to Work scheme. However, the tax and National Insurance benefits apply only to staff who are treated as employees.

Is my business eligible?

­The scheme is available as long the recipient receives a salary through the Pay-As-You-Earn (PAYE) system. Th­is covers directors of limited companies (even if you’re the sole employee) provided a portion of your income is in the form of PAYE and is enough to meet the national minimum wage after the cycle scheme deductions.

Who runs the scheme?

You can administer the scheme yourself (if you meet certain criteria) but it’s likely that you will find it more effective to appoint a provider to do that for you.

When selecting a provider:

  • Check that they are regulated by the FCA for consumer hire of cycles
  • Usually they will have a set number of retailers they offer, check that these work for you in terms of choice and location
  • Take the time to research providers and find one that you are confident with

A good provider will:

  • Ensure the scheme is fully compliant with legislation
  • Administer the scheme for you, reducing complexity
  • Advise you on salary sacrifice arrangements
  • Help you promote the scheme to your employees

How can I encourage my employees to be more active?

Promoting a cycle to work scheme and active travel to the workplace will inspire your team to get moving, even if it’s getting off the bus one stop earlier. Here’s some ideas for encouraging active travel:

  • Provide personal storage – e.g. small lockers
  • Consider putting a mirror (and maybe a hairdryer) into a meeting room if you don’t have dedicated facilities. Block book the room at relevant times of day
  • Provide a hanging rail or wardrobe-style cupboard
  • Explore corporate rate gym memberships in your locality to allow staff to use their facilities
  • Check your local council website for free resources like bike checks and free cycle training – promote these to your team
  • Give genuine permission and celebrate active travellers
  • If you can, offer flexible working times to avoid peak hours

Get active

Many people assume active travel is just about cycling from your home to your place of work, but it can be about much more than that. Put simply, it’s making all or part of any journey active whether you choose to run, walk, cycle, scoot or even skip.

Download our guide to active travel for employers and get moving!

Where can I find more information?

Visit the government’s website to learn more about setting up a cycle to work scheme, or check out our activity hub for more inspiration.