Salary Sacrifice for employees
A guide to the benefits for employees and how to engage your employer to sign up.
What is Salary Sacrifice?
A Salary Sacrifice arrangement is an agreement to reduce your entitlement to cash pay, usually in return for a non-cash benefit.
You can set up a Salary Sacrifice arrangement by asking your employer to change the terms of your employment contract.
A Salary Sacrifice arrangement must not reduce your cash earnings below the National Minimum Wage (NMW) rates. Employers must put procedures in place to cap Salary Sacrifice deduction and ensure that National Minimum Wage rates are maintained.
Is Salary Sacrifice worth it?
With a Salary Sacrifice scheme, you can access a brand-new electric vehicle with lower monthly payments than traditional car leasing. Since the costs are deducted from your pre-tax salary, you pay less Income Tax and National Insurance contributions, making it a cost-effective way to drive a high-quality EV.
Most Salary Sacrifice schemes for EVs offer an all-inclusive package that includes insurance, road tax, servicing, maintenance and breakdown cover. So no worrying about unexpected costs, everything is included in one fixed monthly payment deducted from your pre-tax salary.
Electric vehicles are cheaper to run than petrol or diesel cars. Charging an EV can be much more affordable than fuelling a petrol or diesel car and EVs generally require less maintenance.
Using Salary Sacrifice, you can enjoy a more affordable and hassle-free driving experience while contributing to environmental sustainability.
Ready to set up your scheme? Contact us today
What to consider?
Impact on take-home pay
Opting for Salary Sacrifice lowers your gross income, leading to a decrease in your take-home earnings. It's essential that you've budgeted for this.
Pension contributions
Pension contributions are calculated based on your gross income, so reducing your salary could affect your pension savings, you should check with your employer.
End of lease
When the lease period ends, the vehicle must be returned. Before doing so, familiarise yourself with the conditions regarding wear and tear, mileage limits and any possible fees.
Employment status
If you leave your company, you may have to hand the vehicle back. It might be possible to continue driving your EV if your new employer has a Salary Sacrifice scheme.
Ready to browse our electric cars?
You can find more detailed information on Salary Sacrifice below.
You can also find a step-by-step guide to getting set up for Salary Sacrifice for your business by heading to our How to set-up your Salary Sacrifice scheme page.
Take a look at some of the excellent deals on EVs we offer whilst you wait for your scheme to be set-up.
What are you waiting for?
A Salary Sacrifice scheme for electric vehicles offers a fantastic opportunity for you to drive a brand-new, eco-friendly vehicle at a lower cost.
Citygate Leasing offers an all-inclusive, bespoke service that requires minimal effort from your employer to sign up. We can provide all the details you need to convince your employer.
Want to get started? Contact us today
A summary
For many people, Salary Sacrifice is the easiest and cheapest way to switch to an electric car, with savings of 30-60% possible through the government scheme.
It’s really simple.
- You pay for an EV lease through your employer by ‘sacrificing’ some of your pre-tax salary. This can save you an astonishing 30-60% of the cost of the vehicle, maintenance and insurance.
- And don’t worry, there’s no extra cost or admin for your employer – we do all the paperwork and payroll calculations.
