If you've been hearing more about electric vehicle (EV) salary sacrifice schemes lately, you're not alone. Across the UK, more and more organisations are exploring them as part of their employee benefits offering, and it's easy to see why. Here's a straightforward guide to how they work and what they typically involve.
So, what is an EV salary sacrifice scheme?
In short, it's an employee benefit that lets people lease an electric car through their employer using their gross salary, before Income Tax and National Insurance (NI) are deducted. The organisation partners with an EV scheme provider, and employees exchange part of their salary in return for a fully managed electric vehicle package.
It's worth noting that while the concept is simple, the details of how schemes are structured can vary between providers, so it's always worth understanding exactly what's included before signing up.
How does it work in practice?
The process is usually pretty straightforward, typically:
Most schemes typically include insurance, servicing and maintenance, breakdown cover, tyres, and road tax, all bundled into a monthly payment.
Why are more organisations looking at these schemes?
There are a few reasons why EV salary sacrifice schemes have become more popular in recent years.
Why interest keeps growing
With low Benefit in Kind (BiK) rates for electric vehicles and rising interest in sustainable travel across the UK, EV salary sacrifice schemes have become an increasingly attractive option for organisations looking to modernise their benefits offering. For many businesses, it ticks multiple boxes at once—supporting employees, reducing costs, and contributing to broader sustainability goals.