Employee Salary Sacrifice FAQs

For many people, salary sacrifice is the cheapest way to switch to an electric car. Depending on how much tax someone pays (i.e. how high their salary is), the more they can save, somewhere between 30-60% depending on your tax bracket. 

Companies usually calculate pension contributions using notional salary (an employee’s salary before any salary sacrifice contributions such as a car or childcare). So your pension contribution could be impacted, especially if you are under 3 years from retirement.

A private pension like a SIPP should not be affected. We recommend employees seek professional advice from their company or an Independent Financial Adviser before signing up for the scheme if concerned about pension impacts.

No, most mortgage lenders would not include a salary sacrifice car as part of your affordability assessments, but it may be worth checking with your provider. 

This varies depending on whether the car is considered a company car, or a personal car being used for business travel. For company cars, the Government currently advises a rate of 5 pence per mile for fully electric cars. Hybrid cars are treated as either petrol or diesel for fuel rates – see the Advisory Fuel Rates for more information. If employees use their own personal vehicle, the Mileage Allowance Payments for electric cars are the same as for ICE vehicles: 45p per mile for the first 10,000 miles per year, and 25p per mile after that.

Provided your salary does not go below the National Minimum wage per annum after all salary deductions are made and provided your employer approves, you can usuall take multiple cars on the Scheme. If at any point your salary does go below the National Miniumum wage per annum, your employer will no longer be able to make the usual salary sacrifice deduction pre-tax, so you must either agree to a deduction from your net salary, reimburse your employer from other private means or return the car.

All EVs qualify for Salary Sacrifice and most PHEVs, although EVs are much more tax efficient. We can provide leases for all EVs on the market although your company could restrict your options and you need to make sure you pre-tax salary doesn't drop below the National Minimum wage. 

No, our salary sacrifice cars can be used for both business and personal use.

Under the scheme, you reduce your annual pre-tax salary in exchange for an electric car subscription as a benefit provided by your employer. 

By reducing your salary and receiving the benefit in return, you save on income tax and National Insurance. You do incur a benefit-in-kind tax (“BIK”), but the BIK rate on electric cars is currently fixed at 2% until April 2025. From April 2025, the BiK rate will increase by 1% every year until it hits 7% in 2028.

Your total savings after everything is taken into account should be between 30% and 60% of the advertised subscription cost (depending on your salary).