An employer’s Guide to EV Salary Sacrifice

The road to sustainable benefits doesn’t have to be bumpy!

Remember when company cars were all about status? Now they’re about sustainability. In 2024, more employers are discovering that electric vehicle (EV) salary sacrifice schemes are the perfect way to energise their benefits package while supporting their company’s environmental goals.

A salary sacrifice car scheme is a workplace benefit that allows employees to pay from their pre-tax salary, enabling them to save on National Insurance Contributions and income tax. The employer leases the car from a third-party leasing company, and it is the employee’s responsibility to maintain it. A salary sacrifice company car differs from traditional company car programs for several reasons: it allows employees to save on tax, bundles everything into one salary sacrifice payment, and requires no deposit.

This article explores how EV salary sacrifice works for employers, how to implement it in your company, and the positive impact it can have on your workforce and employee benefits package.

Your Company Takes the Wheel

• You lease electric vehicles from an EV salary sacrifice provider (like The Electric Car Scheme),

• You then agree to provide the car in exchange for the employee looking after the car and sacrificing their gross salary to pay for it.

• Employees get access to brand-new electric cars in exchange for their salary.

• The Electric Car Scheme provides payroll adjustments so the employer recoups the cost of the car from the employee’s salary.

• The employee saves 20-50% on the cost of any electric car by paying from their salary before tax!

Employees Choose Their Route

• Staff select their preferred electric car,

• They agree to a reduction in their gross salary,

• The sacrifice comes from pre-tax pay, resulting in 20-50% savings.

The Journey Continues

• Monthly payments are handled through payroll processing,

• Employees enjoy their new EV with insurance, maintenance, and road tax included,

• Your company benefits from reduced National Insurance contributions.

Electric car salary sacrifice schemes, like The Electric Car Scheme, are a mutually beneficial employee benefit. Here are the main benefits for both companies and employees:

For Your Company:

• No net cost to implement the scheme,
• Enhanced benefits package to attract and retain talent,
• Reduced company carbon footprint,
• Lower National Insurance contributions,
• Complete risk protection is available with The Electric Car Scheme.

For Your Employees:

• Significant savings through tax efficiencies (20-50% off),
• All-inclusive package with maintenance and insurance,
• Access to the latest electric vehicles,
• Lower running costs compared to petrol/diesel,
• Support for their personal environmental goals.

The Numbers That Matter

According to recent data, the average employee switching from a petrol car to an electric vehicle through salary sacrifice could save thousands per year when considering:

• Reduced tax through salary sacrifice,
• Lower fuel/charging costs,
• Minimal maintenance costs,
• Zero road tax.

Setting up an employee benefit, especially an electric car salary sacrifice scheme, can feel overwhelming with so many providers in the market. Here’s a checklist to help you navigate the process and establish a scheme at your company.

Choose Your Provider

• Look for comprehensive risk protection,

• Ensure they offer competitive pricing,

• Check their support services and reporting capabilities.

Set Up Your Scheme

• Work with your chosen provider to get the scheme set up,

• Establish a working relationship with your account manager,

• Ensure you’re happy with the payroll process and documentation provided by the provider.

Launch to Employees

• Communicate the benefit clearly to your employees with your provider,

• Launch a drive day with the provider,

• Host information sessions or webinars to help inform your employees about the new benefit!

Future-Proofing Your Benefits

With the government’s 2030 target to end new petrol and diesel car sales, implementing an EV salary sacrifice scheme now puts you ahead of the curve. It’s not just about offering another benefit – it’s about leading the charge toward a more sustainable future.

Ready to electrify your benefits package? Discover how to implement The Electric Car Scheme at your company – a cost-neutral benefit that enhances your environmental, social, and governance goals while making your workforce feel valued!