Plan cycle to work or bike scheme salary sacrifice impact on gross salary, take-home pay, pension, and monthly deductions.
Cycle to work is a hire agreement, not a purchase: the bike is bought through the scheme and hired to you, and you give up part of your gross salary over the hire period to cover it. Because the deduction comes off before Income Tax and National Insurance, the real cost to you is less than the price of the bike. It differs from pension sacrifice in that the money is spent rather than saved, and there is usually a transfer or extended-hire fee at the end.
Enter the value, the hire period and the salary it comes out of. The deduction happens before Income Tax and National Insurance.
Giving up £100.00 of gross pay a month for 12 months costs £864.00 rather than £1,200.00, because the deduction happens before Income Tax and National Insurance are worked out. Over the hire that is £240.00 of Income Tax and £96.00 of National Insurance never charged. Income Tax is settled on each tax year separately, so when the hire starts matters. These figures assume it begins at the start of a tax year, so the whole amount falls in one. A hire starting part-way through a year splits differently, and where that moves part of the amount across a tax threshold the total changes either way. This is the cost before the end of the hire. You are hiring the equipment rather than buying it, so it is not yours during that time. At the end a scheme may charge a fee to transfer ownership, extend the hire for a further period at little or no cost, or take the equipment back. A transfer fee comes out of taxed pay, so it reduces the saving above by its full amount, and on a short hire it can be most of it — check which route your scheme uses before treating this figure as final. A sacrifice cannot take cash pay below the minimum wage, and this one does not come close: it leaves £17.33 an hour against a £12.71 floor. All of this assumes the scheme qualifies for the cycle-to-work exemption, which is what keeps the amount given up from being taxed as a benefit in kind: the offer has to be open to employees generally, and the bike mainly used for commuting. Where a scheme does not meet those conditions the saving above does not arise. The figures are for the 2026/27 tax year, use England, Wales and Northern Ireland Income Tax rates, and assume the salary is the only income with no pension contribution or student loan. Salary sacrifice outputs are estimates, not payroll, tax, pension, financial, mortgage, or legal advice.
| Tax/source year | 2026/27 |
|---|---|
| Region | England/Wales/Northern Ireland |
| Tax code basis | 1257L where the page uses PAYE defaults |
| Pension basis | No pension deduction unless this example says otherwise |
| Student loan basis | No student loan unless selected in this example |
| What is not decided here | PayBreakdown does not decide payroll correctness, lender approval, benefit entitlement or employer compliance, and does not give regulated financial, mortgage, debt, tax, payroll or legal advice. |
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The figures on this page are worked from cycle to work, using the values below. Open the calculator if your example salary differs.
This estimate is worked out on £35,000 annual gross. Change any of those and the take-home figure moves; pension method and student loan plan usually move it most. A payslip can differ from any calculator because payroll works pay period by pay period, so a tax-code change, a bonus, arrears or a refund can land in one month and not the next. See how each deduction is worked out.
No. It is an estimate worked from published HMRC and GOV.UK figures for the current tax year, using the assumptions shown on this page. It cannot see your tax code history, benefits in kind or employer payroll rules, so check important decisions against your payslip, official guidance or a qualified adviser.
Yes. Open the linked calculator to change the salary, pension, tax code, region or student loan plan and the figures update as you type.
Last updated 2026-08-27. Checked by Sean Elsmore. Rates last checked against GOV.UK on 2026-08-07. Estimates are for planning and should be checked against official records where the decision matters.