Salary Sacrifice Your Next Car
Getting a new car through work has never been more affordable. With salary sacrifice cars, you can drive a new electric vehicle whilst saving 20-50% compared to traditional car leasing.
Whether you're an employee looking to upgrade your car or an employer wanting to offer valuable benefits, our electric car salary sacrifice scheme makes premium vehicles accessible to everyone.
What Is Salary Sacrifice?
Salary sacrifice is an arrangement where an employee agrees to reduce their gross salary in exchange for non-cash benefits. A salary sacrifice car scheme is one of the most popular applications of this, allowing employees to drive a brand-new electric car by paying from their pre-tax salary rather than post-tax income. This lowers taxable income, which reduces both Income Tax and National Insurance contributions each month.
Our Picks For Cars You Can Salary Sacrifice In May 2026
Our salary sacrifice calculator shows exactly how much you could save on any electric vehicle. Explore some of the most popular salary sacrifice cars available through The Electric Car Scheme.
Tesla Model 3
344 miles range
£477/mon
Polestar 4 Estate
385 miles range
£489/mon
Omoda 5 Electric
267 miles range
£260/mon
Ford Explorer
233 miles range
£372/mon
Renault 5 E-tech
192 miles range
£229/mon
Alpine A290
224 miles range
£320/mon
Jaecoo 5 Electric
248 miles range
£323/mon
MG Motor UK IM5
3045 miles range
£377/mon
Save 20-50% on the cost of your next EV lease through our electric car salary sacrifice scheme.
Is a Salary Sacrifice Better Than a Personal Lease?
The core difference between personal leasing and salary sacrifice comes down to where the payment comes from and what's included.
For a basic-rate taxpayer, the pre-tax payment structure alone typically reduces the effective cost of a new electric car by around 30% compared to leasing the same car privately, with higher-rate taxpayers saving more.
The bundled package through The Electric Car Scheme also removes the separate costs of insurance and maintenance that a personal leaseholder would budget for on top. Use the salary sacrifice calculator to see an estimated figure based on your salary and chosen car.
| Salary Sacrifice Car Lease | Personal Car Lease | |
|---|---|---|
| Payment source | Pre-tax salary | Post-tax income |
| Income Tax saving | Yes | No |
| National Insurance savings | Yes | No |
| BiK tax applies | Yes (4% for EVs, 2026/27) | No |
| Insurance included | Yes | Separate arrangement |
| Maintenance included | Yes | Separate arrangement |
| Typical saving vs personal lease | 20-50% | — |
| Employer required | Yes | No |
How Benefit in Kind Affects Salary Sacrifice
Benefit in Kind, or BIK, is the tax you pay when you receive a benefit from your employer, such as a company car.
When you choose a car through salary sacrifice, the lease cost is taken from your gross salary before tax, reducing your taxable income. You then pay BIK tax on the car, based on its list price, emissions, and your tax band.
Electric cars have very low BIK rates. This means the tax you pay is minimal, making electric cars extremely cost-effective through salary sacrifice. The result is a lower monthly cost compared to leasing privately, with your take-home pay reduced by the net cost after tax savings and BIK.
Is a Salary Sacrifice Car a Company Car?
Technically, yes. Your employer leases the vehicle and provides it to you as a benefit. The difference is in the tax treatment. Traditional company cars attract BiK rates of up to 37% for petrol and diesel vehicles. Through electric car salary sacrifice, BiK is charged at just 4% in 2026/27, and you choose your own vehicle rather than accepting what's assigned. The tax treatment of company car salary sacrifice differs significantly from a traditional company car arrangement.
How Does Salary Sacrifice Work For Employees?
Sacrificed salary is not taxable, saving thousands of pounds
The employee saves 20-50% on the cost of any electric car by paying from salary before tax.
Serving thousands of customers and rated “Excellent – 5 stars” on Trustpilot, you can rest assured that you are in good hands.
Your employer leases an electric car
Employees get the car (as a benefit) in exchange for salary
The employer agrees to provide the car in exchange for the employee looking after the car and sacrificing gross salary to pay for it.
When you choose vehicle salary sacrifice through The Electric Car Scheme, everything you need is bundled into your monthly payment.
New Electric Car - Choose from hundreds of models
Optional Comprehensive Insurance - Fully comprehensive cover included
All Maintenance - Servicing, repairs, and warranties covered
Breakdown Cover - 24/7 roadside assistance across the UK
Road Tax & MOT - All legal requirements handled
Optional Home Charger - Installation and hardware included
Replacement Tyres - When worn, we'll replace them
Risk Protection - Full support if the unexpected happens
Charging - Access to thousands of public charging points and The Charge Scheme
This comprehensive package means no hidden costs or unexpected bills. Everything is covered in your salary sacrifice scheme, giving you complete peace of mind.
Understanding what is salary sacrifice can help you maximise your savings. By paying for your car before tax and National Insurance, you reduce your taxable income whilst getting access to a premium electric vehicle.
Everything's Included with
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Frequently Asked Questions
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A salary sacrifice car is an electric vehicle provided to an employee by their employer as part of an HMRC-approved salary sacrifice arrangement. The employee agrees to reduce their gross salary by the lease cost of the car, which lowers their taxable income and reduces the amount of Income Tax and National Insurance they pay each month. See how much you could save on the cost of an EV by visiting our salary sacrifice calculator.
The car is technically leased by the employer and made available to the employee as a workplace benefit, which means BiK tax applies, though for electric vehicles the rate is just 4% (2026/27).
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Eligibility is set by the employer, but the scheme is open to most UK employees in permanent or long-term employment. The main condition is that the salary sacrifice amount must not reduce an employee's gross salary below the National Living Wage (£12.21 per hour for workers aged 21 and over, from April 2025).
Employers using The Electric Car Scheme can set their own eligibility criteria and access tools to check affordability before an order is placed.
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If you leave your employer during the lease term, the arrangement ends.
Through The Electric Car Scheme, employees and employers are covered by Complete Employer Protection from day one, which means neither party is exposed to unexpected early termination costs in most circumstances. You'd typically return the vehicle, and the salary sacrifice deductions would stop. It's worth reviewing the specific terms with your employer before committing to a lease.
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Through The Electric Car Scheme, employees can choose from hundreds of new electric car models across most major manufacturers, as well as a range of nearly new and used electric vehicles. There's no restricted list of preferred models, so you're not limited to a small selection. The available cars are updated regularly, and you can browse and get an instant quote directly through the platform.
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Yes. "Green Car Scheme" is a colloquial name for electric car salary sacrifice - it's the same product, with the same tax mechanism behind it. You sacrifice a portion of your gross salary in exchange for an electric car (or a qualifying plug-in hybrid), which means you save 20–50% on the cost compared with leasing personally.
Different names crop up depending on who's talking - "Green Car Scheme", "company electric car scheme", "EV salary sacrifice" - but the underlying product is the same. At The Electric Car Scheme, you'll find it under any of those names.
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It's a benefit your employer offers - but it works very differently from a traditional company car scheme.
Both count as "company cars" in HMRC's eyes, so Benefit-in-Kind (BIK) tax applies. The difference is the rate: just 4% on fully electric cars in 2026/27, and 6-20% on qualifying plug-in hybrids - compared with 25–37% for petrol or diesel. That's why salary sacrifice on an electric car can save you 20–50%, and why most modern UK schemes (including ours) focus on EVs and qualifying PHEVs rather than the wider vehicle range you'd see in a traditional company car arrangement.
In short: same legal framework, very different economics. And with Complete Employer Protection from day one, your business is covered against any unexpected costs along the way.
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Because every car available through the scheme is either fully electric or a qualifying plug-in hybrid (≤75 g/km CO₂). Every vehicle qualifies for the lowest Benefit-in-Kind tax bands - and produces a substantially lower carbon footprint than a petrol or diesel equivalent.
The name reflects what the scheme actually does: it makes greener driving genuinely affordable for everyday employees, while supporting your business on the journey to Net Zero. "The Electric Car Scheme" is our formal name; "Green Car Scheme" is shorthand for the same thing.
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Our blog is to provide readers with comprehensive information about the Electric Car Scheme, including its benefits, challenges, and the future of Net Zero. We cover a range of topics, from the technology behind electric cars and how they work, to the different models available on the market. Whether you're a seasoned electric car owner, or just starting to explore the possibilities of this exciting technology, this blog is the perfect resource for you.
