Trusted electric car salary sacrifice for employers

There's no setup fee or ongoing running cost for employers with The Electric Car Scheme. The fee is structured as a share of the National Insurance savings the employer generates, which means the scheme is cost-neutral to run. Employers don't need to fund the lease upfront, and there's no capital expenditure involved.

The Electric Car Scheme is different from the usual car leasing providers. Instead of paying with your post-tax income, the fixed monthly payments for the car are taken from your salary before any Income Tax or National Insurance is deducted.

The percentage of savings available is dependent on your salary, marginal tax rate and the Benefit in Kind (BIK) tax rate - simply, the more tax you pay, the more you save with The Electric Car Scheme. You can calculate your savings here.

A car through The Electric Car Scheme is an employee benefit provided to you. As it’s a ‘company car’, there is a company car tax payable. However, the value of this BIK is set by HMRC, and set at very low rates until at least 2030.

Employers save National Insurance contributions on the portion of salary that's sacrificed. At the current employer NI rate of 15%, a business with 50 employees each sacrificing £500 per month would typically save around £45,000 per year in employer NI alone.

Savings scale with headcount and the value of the cars chosen, so larger schemes generate proportionally greater returns.

This is the primary risk employers face with salary sacrifice, and it's where provider choice matters significantly. The Electric Car Scheme provides Complete Employer Protection from day one, covering early termination costs if an employee leaves, is made redundant, goes on long-term sick leave, or loses their licence. Employers should request written confirmation of protection terms from any provider before signing.

Because salary sacrifice reduces gross pay, it can affect pension contributions calculated on a percentage of salary and may affect mortgage affordability assessments. Employers have a duty to make employees aware of these implications before they opt in.

The Electric Car Scheme provides employee-facing materials to ensure staff can make an informed decision, and the scheme can be structured to protect pension contributions where needed.

There's no minimum headcount requirement to join The Electric Car Scheme. The scheme is available to businesses of all sizes, from small employers to large enterprises.

Smaller businesses can still generate meaningful NI savings and use the benefit as a recruitment and retention tool, even with a single eligible employee taking a car.

Employees can choose from a wide range of electric vehicles, with The Electric Car Scheme searching across the market's top leasing companies to secure the best available prices. There's no fixed restricted list, though employers can choose to set a cap on P11D value or monthly cost if they want to define the parameters of their scheme. Cars are available from around £128 per month, making the benefit accessible across salary bands.