Why the Cycle to Work Scheme is a Win-Win for Everyone

The Cycle to Work Scheme is one of the UK’s most popular employee wellness initiatives, but it’s not just about saving money on bikes. It’s a powerful tool for building healthier, happier workplaces while supporting wider employer wellbeing programmes. 

At Planet Once, we know that wellbeing is about more than ticking boxes. Real engagement comes from giving employees practical, accessible ways to feel good and stay active. The cycle to work challenge is a perfect example of how to blend workplace benefits with long-term wellbeing. 

Let’s take a closer look at what the scheme offers and why it’s worth including in any forward-thinking wellbeing strategy. 

What is the Cycle to Work Scheme? 

The Cycle to Work Scheme allows employees to buy a bike and accessories through their employer via a salary sacrifice arrangement. Employees pay for the bike in monthly instalments taken from their gross salary, which reduces the amount of tax and National Insurance they pay. 

The scheme is widely used across the UK and has been backed by the government since 1999 as a way to promote greener commuting and healthier lifestyles. 

Benefits to the Employee 

The biggest draw for employees is the tax savings. By purchasing a bike through the scheme, employees can save between 25% and 39% off the total cost, depending on their tax band. 

Here’s how it works in practice: 

Basic Rate Taxpayers (20%): A £1,000 bike could cost around £680 over the salary sacrifice period. Example monthly payment: £56.66 for 12 months. 

Higher Rate Taxpayers (40%): A £1,000 bike could cost around £580. Example monthly payment: £48.33 for 12 months. 

Additional Rate Taxpayers (45%): A £1,000 bike could cost as little as £550. Example monthly payment: £45.83 for 12 months. 

Not only do employees get a high-quality bike at a significant discount, but they also spread the cost interest-free, making it a really affordable way to commute. 

Other employee benefits: 

• Better physical and mental health 

• Lower commuting costs 

• Reduced travel time, especially in busy cities 

• Increased daily activity without needing a gym 

  
  

Benefits to the Employer 

The Cycle to Work Scheme is a key part of any proactive employer wellbeing programme. It encourages employees to build healthy habits, which can lead to long-term business benefits. 

Here’s what’s in it for employers: 

• Healthier workforce: Employees who cycle regularly can reduce their risk of chronic illnesses by up to 45%, including heart disease, type 2 diabetes, and some cancers. 

• Happier employees: Cycling is linked to lower stress levels and improved mental health, helping reduce absenteeism. 

• Reduced sick days: According to the Office for National Statistics, physical inactivity costs UK businesses around £7.4 billion each year in lost productivity. Supporting active travel can help lower this cost. 

• Boosted employee engagement: Offering the scheme shows a genuine investment in employee wellbeing. 

• Environmental credentials: Supporting cycling contributes to a greener, more sustainable company image. 

  
  

By integrating a cycle to work challenge into your wellbeing calendar, you can take this one step further. Set company-wide goals, encourage friendly competition, and make cycling a social activity as well as a commuting option. 

Aligning Wellbeing Strategy with Movement 

Offering the Cycle to Work Scheme is a great first step, but to really embed it into your employer wellbeing programme, it helps to align it with a wider movement strategy. Businesses can encourage regular activity by creating simple, inclusive initiatives like step challenges, lunchtime walking groups, or company-wide cycle to work challenges. By building movement into the daily culture, you help employees stay active in a way that feels natural, not forced. Movement-based initiatives are proven to boost productivity, improve mood, and reduce musculoskeletal issues. The key is to offer varied options that meet different ability levels and make it easy for everyone to get involved, whether they’re cycling, walking, or simply moving more throughout the day. 

The Cycle to Work Scheme is more than just a tax break. It’s a fantastic way to support both your employees and your wider wellbeing programme. By making it part of your active workplace strategy – and perhaps linking it to a cycle to work challenge – you can create a culture that encourages healthier lifestyles, reduces sick days, and genuinely improves day-to-day life for your teams. 

At Planet Once, we believe in building meaningful, engaging employee wellness initiatives that go beyond the basics. If you’d like to explore how the Cycle to Work Scheme can fit into your wider wellbeing strategy, get in touch. 

This information is correct as of 18/06/2025 As with any scheme individual tax benefits vary based on your personal/company circumstances. Please seek advice from your accounting team if this is right for you.