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If you sit in HR, benefits or sustainability, Electric Car Salary Sacrifice has probably crossed your desk at some point, and there’s a chance you parked because it sounded expensive, or like a lot of admin and moved on. The Electric Car Scheme has been built specifically to answer both objections, making EV Salary Sacrifice an easy and equitable benefit.
A recent survey of over 250 senior HR professionals found that most assumed a scheme like this would cost their business money to launch and run, and most also assumed it would take considerable internal effort to manage! Neither tends to hold up once you look at how The Electric Car Scheme is actually structured.
Electric car salary sacrifice works by employees giving up part of their gross salary in exchange for the lease of an electric car, arranged through their employer. The deduction happens before income tax and National Insurance, so employees typically save 20-50% on the cost of a car. That saving comes from HMRC’s tax treatment, not from the business subsidising anything! On the employer side, the same mechanism reduces the employer’s National Insurance contributions on that portion of salary.
The Electric Car Scheme is completely cost neutral whilst offering:
- Full control over your national insurance savings
- The whole package with all maintenance & optional insurance
- Spread the cost of home charger installation
- New & used electric cars, hybrids and subscription cars
- Un-capped early termination protection from day one for employers
- Market-leading life event support protection
The real hesitation usually isn’t cost, it’s risk. What happens if an employee resigns, is made redundant, or goes on long-term sick leave halfway through a lease? Without protection, the employer can be left carrying the early termination fee, which is a big burden to carry.
The Electric Car Scheme’s Complete Employer Protection & Employee Life Event Support does the heavy lifting for you. It’s uncapped and applies from day one across:
- Work events like resignation, redundancy & dismissal
- Life events like parental and family-friendly leave & long term sickness
- Loss of licence
- Divorce, involuntary salary reduction, partner redundancy & partner sickness
Clients including Holland & Barrett and Dreams have specifically pointed to this protection as the reason they moved ahead with a scheme after initially holding off over the liability risk.
It takes less time than most benefits reviews and you’ll walk away knowing whether this is worth pursuing further, one way or the other.
Where does this fit in with your Net Zero targets?
If part of your role touches ESG or Net Zero reporting, this is one of the few benefits that moves the needle on both people and planet. Every employee who swaps a petrol or diesel car for an EV through salary sacrifice makes a measurable dent in your Scope 3 figures. The Electric Car Scheme is B Corp certified and its customers have collectively saved an estimated 14,000 tonnes of CO2e, roughly equivalent to planting 650,000 trees – the kind of figure that’s genuinely useful in a board meeting!
It’s also currently one of the only salary sacrifice providers extending the same tax saving to charging costs. Through The Charge Scheme, employees can save 20-50% on charging at home, at the office or on the public network.
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FAQs
Does offering this benefit actually help with retention?
Employers running The Electric Car Scheme report it’s a strong differentiator in benefits comparisons, since the saving is visible in employees’ payslips every month and reinforces sustainability commitments in a tangible way.
How much admin does it take to run?
The Electric Car Scheme handles reporting and payroll inputs through an employer portal, including HMRC filings such as P46 (Car) and P11D forms, with a dedicated Customer Success Manager on hand throughout.
Can employees’ salary sacrifice their charging costs too?
Yes, through The Charge Scheme, employees can save 20% to 50% on charging at home, at work or on the public network.
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John is the Editor and Spokesperson for Electric Car Guide.
With over 20 years of writing experience, he has written for titles such as City AM, FE News and NerdWallet.com, covering various automotive and personal finance topics.
John’s market commentary has been covered by the likes of The Express, The Independent, Yahoo Finance and The Evening Standard.
