United Kingdom: what it costs and how it is taxed

This article applies to the United Kingdom.

What you pay per bike

We invoice you for the full amount, whatever you decide to contribute.

Cycle to Work

Swapfiets can be offered through Cycle to Work, the salary sacrifice scheme under Section 244 ITEPA 2003.

Your employee gives up an agreed amount of gross pay in exchange for the bike, so they pay no Income Tax or National Insurance on it. A basic rate taxpayer saves around 28%, a higher rate taxpayer around 42%. You save employer National Insurance on the sacrificed amount.

Bikes and safety equipment under the scheme are exempt, so unlike a salary sacrifice car there's no benefit-in-kind to report and nothing extra for your employee to pay.

No fair market value payment at the end

This is where a subscription differs most from a typical Cycle to Work arrangement.

Under a standard scheme, your employee hires a bike for a fixed term, usually 12 months, and then faces a decision: buy it at fair market value, typically 18% to 25% of the original price, or enter an extended hire period to defer it. Getting that wrong creates a retrospective benefit-in-kind charge, so payroll has to manage it carefully.

None of that applies here. The bike stays ours throughout, there's no ownership transfer, and no end-of-hire decision to administer. Your employee rides it for as long as they want it.

Nothing to settle if someone leaves

Under a standard scheme, an employee who leaves before their hire term ends loses the tax exemption immediately, and the outstanding balance is recovered from their final net pay. That's an unwelcome surprise on someone's last payslip and an awkward conversation for HR.

With us, the subscription is monthly. Give 30 days' notice and it ends, or your employee keeps the bike on a personal subscription in their own name. There's no outstanding balance because there's no term to break.

What to check before you offer it

National Minimum Wage. Salary sacrifice can't take an employee's pay below £12.71 an hour from April 2026. Because our monthly amounts are low, this rules out far fewer people than a scheme built around a £1,000+ bike, but it's still worth checking for your lowest-paid staff.

Pension contributions. Sacrifice reduces qualifying earnings. Your scheme rules should specify whether pension contributions are calculated on post-sacrifice pay or on notional pre-sacrifice salary.

Statutory pay. Maternity, paternity and sick pay are calculated on average earnings during a qualifying period, so sacrifice during that window reduces them.

Qualifying journeys. HMRC requires the bike to be used at least partly for commuting. It doesn't have to be the only use.

If you'd rather not use Cycle to Work

You can offer Swapfiets without it. Fund it fully or partly yourself and treat it as a normal business expense, with no salary sacrifice arrangement to set up and no minimum wage constraint to manage.

What it costs your organisation

The subscription is a deductible business expense. Where your employees sacrifice salary, you also save employer National Insurance on the sacrificed amount.