See How Much You'd Save on an Electric Car Through Salary Sacrifice

Salary sacrifice (also called salary exchange) is an arrangement where you give up part of your pre-tax salary in exchange for an electric car. Because the deduction happens before tax and National Insurance, you pay less on both – typically saving 20-50% compared to leasing personally.

Savings vary based on your tax bracket, but most employees save 20-50% compared to a personal lease. Basic rate taxpayers (20%) typically save 20-30%, while higher rate taxpayers (40%) can save 40-50%. These savings come from reduced Income Tax, National Insurance, and low 4% Benefit-in-Kind rates for electric vehicles.

It can, depending on how your pension is calculated. If your pension contributions are based on your reduced salary (after sacrifice), they may be lower. However, many employers calculate pensions on your pre-sacrifice salary. Check with your HR department to understand how your specific pension scheme works.

Salary sacrifice reduces your gross salary, which lenders use to assess mortgage applications. Some lenders may consider your pre-sacrifice salary if you explain the arrangement, but it's worth discussing with a mortgage advisor before entering a salary sacrifice scheme if you're planning to apply for a mortgage soon.

Item If you leave your employer during the lease term, you'll typically need to either: return the car and settle any early termination fees, continue payments if your new employer offers the same scheme, or arrange to take over the lease personally. Specific terms depend on your contract and provider.

Yes – your salary after the sacrifice cannot fall below the National Minimum Wage. Your employer must ensure the deduction doesn't take you below this threshold. For 2026/27, this means careful calculation for those earning closer to minimum wage.

Most EV salary sacrifice schemes include: the vehicle lease, fully comprehensive insurance, road tax, servicing and maintenance, breakdown cover, and tyre replacement. Some schemes also include home charging installation. Everything is bundled into one monthly payment from your pre-tax salary.

Typical lease terms are 2-4 years (24-48 months). You'll agree to the term at the start, and at the end you can return the car, extend the lease, or sometimes purchase the vehicle depending on your provider's terms.

Electric vehicles have significantly lower BiK rates than petrol or diesel cars. For 2026/27, EVs are taxed at just 4% of their list price, compared to up to 37% for high-emission vehicles. This low rate is locked in until 2028, making EVs particularly attractive for salary sacrifice.

This depends on your employer's scheme and provider. Most schemes offer a wide range of electric vehicles from popular manufacturers, but there may be restrictions on maximum value or specific models. Check with your employer's scheme provider for their available vehicle list.

No – the car is owned by the leasing company and provided to you by your employer as part of your benefits package. You use it for the duration of the lease term but don't own it. At the end of the lease, you typically return it or have options to extend or purchase depending on the agreement.