Employer: What are the savings for the employee and employer?
Employee savings:
Typical savings for employees are a minimum of 21% for a standard rate taxpayer, assuming that Cyclescheme's convenient ownership solution is applied, but the actual amount depends on the employee’s personal tax band and the way the employer runs their scheme. If the employer uses external finance (i.e. borrows the money to buy the bikes from an outside agent) then savings will be approximately 5% lower.
Top tip 💡
Cyclescheme's cycle to work calculator can give you a forecast of employee savings based on any employee salary and bike/accessories price range.
See below for some example employee savings based on a lower rate taxpayer (28%):
| Retail Price | £250 | £500 | £750 |
|---|---|---|---|
| Income tax and NI saved | £70 | £140 | £210 |
| Monthly NET payments (IE. take-home pay) | £15.00 | £30.00 | £45.00 |
| 'Own it later' ownership fee | £7.50 | £15.00 | £52.50 |
| The total cost of the Cyclescheme package | £187.50 | £375.00 | £592.50 |
| The total percentage saved | 25% | 25% | 21% |
See below for some example employee savings based on a higher rate taxpayer (42%):
| Retail Price | £250 | £500 | £750 |
|---|---|---|---|
| Income tax and NI saved | £105 | £210 | £315 |
| Monthly NET payments (IE. take-home pay) | £12.08 | £24.17 | £36.25 |
| 'Own it later' ownership fee | £7.50 | £15.00 | £52.50 |
| The total cost of the Cyclescheme package | £152.50 | £325.00 | £487.50 |
| The total percentage saved | 39% | 39% | 35% |
Employer savings:
Employers can typically save 13.8% of the total value of salary sacrifice, due to reductions in employers’ National Insurance Contributions (NICs).
Top tip 💡
Cyclescheme's employer benefit calculator can give you a forecast of your employer savings based on the number of employees your workforce has.
See below for some example employer savings:
| Company Size | 250 | 1,000 | 10,000 |
|---|---|---|---|
| Scheme take up | 3.83% | 3.83% | 3.83% |
| Average cost of bike and/or accessories | £750 | £750 | £750 |
| Your organisation's saving (based on 13.8% NICs) | £818.00 | £3,271.00 | £32,714.00 |
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