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What Happens if an Employee Leaves Before Repaying Their Cycle to Work Scheme?
What Happens if an Employee Leaves Before Repaying Their Cycle to Work Scheme?
Michael Colley avatar
Written by Michael Colley
Updated over a week ago

If an employee leaves your company before fully repaying their Cycle to Work scheme, here's what you need to know:

Final Salary Deductions

When an employee leaves during the repayment period, any outstanding balance on their Cycle to Work scheme should be deducted from their final salary. You can do this by adding a Net adjustment pay item.

As the name suggests, these deductions are taken from NET pay (after tax), removing any tax benefits they previously enjoyed.

For example, if an employee has completed 4 out of 12 payments, the remaining 8 payments will be deducted from their final Net salary. This is known as a "Termination Fee."

Handling Negative Pay

If the outstanding balance exceeds the employee's final salary, they may end up with a negative payslip, meaning they owe money to the company. Any accrued holiday pay can be manually adjusted to offset this.

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