Salary Sacrifice
Salary Sacrifice is a smart, tax-efficient way to exchange part of your salary for a brand-new company car. By sacrificing a portion of your gross salary, you receive a car provided by your employer, which can save you money on Income Tax and National Insurance. It's an easy way to save money and get more out of your salary!
In a nutshell...
Salary sacrifice gives eligible employees the chance to drive a brand-new leased car whilst saving money! By exchanging part of your salary for a vehicle, with a contract ranging from 24 to 48 months, you can enjoy all the perks of a new car for less.
Though you’ll pay Benefit in Kind (BIK) tax, the scheme still offers big savings. Since the salary deduction comes from your gross pay (before tax and National Insurance), it’s more cost-effective than leasing a car on your own.
How much could I save with salary sacrifice?
You could save between 30-60% on the monthly lease cost of an electric car! The exact savings depend on your salary, tax bracket, and the Benefit in Kind (BiK) tax rate.
Great news: In 2022, the UK Government confirmed that electric vehicles (EVs) will only pay the ultra-low BiK rate of 2% until 2025, after which it will rise by just 1% each year until 2028.
In comparison, the BiK rate for traditional petrol or diesel cars can be as high as 37% - a huge difference!
What is included in the monthly cost?
One fixed monthly payment covers not only the car but everything else required to keep you mobile. Tyres, repairs, maintenance, breakdown and even insurance.
We've got you covered!
Why it’s beneficial for you and your employer:
Suggesting the benefit to your employer may feel daunting, but in reality it’s an easy pitch. Here are the headlines they’ll be more than happy to hear:
- Completely cost-neutral for employer
- Offer current and prospective employees an effective pay rise
- Improve green credentials without spending a penny
- New and used options available
- Implement the best employee benefit, choose the best provider
What’s the catch?
No catch, we just need your employer on board.
Your employer leases the car on your behalf. Each month, you then pay for the lease using a proportion of your gross salary.
Because it’s an employee benefit, you’re only able to access salary sacrifice via your workplace. However, it’s completely cost-neutral for your company to implement and it benefits them, too.
Hopefully you can see the benefits now whether you are an employee or the employer!
You can check if your company is eligible below and then start searching for your ideal EV!