Salary sacrifice for electric cars

Your monthly salary sacrifice payment with The Electric Car Scheme includes far more than just the vehicle itself. The all-inclusive monthly cost covers your chosen electric car, roadside assistance, maintenance, servicing, road tax, and optional comprehensive insurance - all bundled into one simple pre-tax payment.

There are no upfront deposits required, which makes getting started hassle-free. Plus, with the Electric Car Scheme's Complete Employer Protection, both you and your employer are safeguarded from unexpected costs if you need to return the car early. Your scheme can also be set up to offer the option to add salary sacrifice charging through The Charge Scheme, allowing you to save 20-50% on all your EV charging costs.

In addition, a home charger installation can be bundled into your scheme.

Salary sacrifice significantly reduces electric car costs through a simple but powerful tax mechanism. You agree to exchange part of your gross (pre-tax) salary to cover your monthly vehicle payments, which means you don't pay income tax or National Insurance on the sacrificed amount.

For example, if your monthly EV payment is £500, as a 40% taxpayer you'd normally need to earn £833 to have £500 left after tax. With salary sacrifice, you only give up £500 from your pre-tax salary, immediately saving you £333.

You do pay a small Benefit-in-Kind (BiK) tax on electric cars, but with the current rate at just 3% for 2025/26, the tax impact is minimal compared to your savings. Drivers can typically save between 20-50% on their electric car costs through this arrangement, making premium electric vehicles suddenly much more affordable.

No, salary sacrifice is not limited to new electric cars only. The Electric Car Scheme has expanded its offering to include used electric vehicles, making the switch to electric even more affordable and accessible. This used car option provides significant cost savings while still delivering all the benefits of the salary sacrifice scheme. We also offer subscription-based options, providing greater flexibility for businesses of all sizes, including startups.

Used electric cars through salary sacrifice come with quick delivery times - you can have a car on your driveway within 14 days of placing your order, avoiding the longer lead times often associated with new vehicles. This comprehensive approach ensures that regardless of your budget or preference, there's an electric vehicle option available through salary sacrifice.

Through The Electric Car Scheme, you have access to virtually any electric vehicle on the market. You can choose from any manufacturer and model, allowing you to drive away with the electric car that perfectly suits your needs and preferences. The scheme offers vehicles across all price points, from more affordable options like the MG4 to premium models from brands like Tesla, Audi, and BMW.

Both new and used electric vehicles are available, with used EVs providing an even more cost-effective entry point to electric motoring. We offer a curated marketplace of used cars - with quality-assured pre-owned electric cars at significantly lower monthly prices.

Whether you're looking for a compact city car, family SUV, or luxury vehicle, the salary sacrifice scheme provides access to the full spectrum of electric vehicles with substantial savings on each.

Getting started with The Electric Car Scheme is straightforward and begins with your employer. First, a senior decision maker at your company (typically a Director or HR Manager) needs to speak with The Electric Car Scheme to set up the program. Our team of Product Specialists will handle the scheme setup and launch, ensuring a hassle-free process for your organisation.

Once your company is enrolled, you can use the online salary sacrifice calculator to see how much you could save on any electric car of your choice. After selecting your vehicle, our team will guide you through the process. They'll handle all the paperwork and vehicle ordering, providing support every step of the way. With the Complete Employer Protection in place from day one, both you and your employer can proceed with confidence, knowing you're protected from unexpected costs.

Here's a practical example of how salary sacrifice makes electric cars more affordable: For a Kia Niro EV on a three-year lease with 10,000 miles per year, a 40% taxpayer would significantly reduce their monthly costs through salary sacrifice. Without salary sacrifice, this vehicle might cost around £710 per month after tax.

With salary sacrifice, the same driver would have the payment taken from their pre-tax salary, saving both income tax (40%) and National Insurance (2%). They would only pay a small Benefit-in-Kind tax (currently 3% for 2025/26) on the vehicle. The result is a net cost of approximately £461 per month - a saving of nearly £250 monthly or £9,000 over the full three-year term.

The higher your tax bracket, the more you save, with potential savings of up to 50% compared to traditional leasing.