Salary Sacrifice is the most popular way to drive an EV

Driving an electric vehicle (EV) has never been easier, thanks to salary sacrifice schemes that offer both financial and environmental benefits for both employers and employees.

Recent data from the British Vehicle Rental and Leasing Association’s (BVRLA) Leasing Outlook Report reveals the country’s salary sacrifice fleet has grown by a remarkable 51% year-on-year, with the majority of these cars, EVs.

Unlike a traditional company car scheme, which is limited to company car drivers and perk users, salary sacrifice schemes are open to almost all employees (as long as they earn more than National Living Wage after reductions). This helps explain its rapidly growing appeal, especially among those who wouldn’t be offered a traditional company car.

Tusker continues to see the number of 20% taxpayers that take advantage of salary sacrifice grow, particularly among public sector workers such as nurses and healthcare professionals, where their car is a necessary tool for daily work.

Benefits for Employees

The standout advantages of salary sacrifice schemes are the financial savings they offer to employees. By opting into such a scheme, the monthly amount for the car is taken out of their pre-tax salary which leads to lower income tax and National Insurance contributions (NICs).

Beyond the financial perks, salary sacrifice schemes provide all-inclusive packages covering maintenance, servicing, insurance, and breakdown cover. This means drivers can enjoy a ’just charge and go” experience, with all essential services bundled into a single monthly amount, making budgeting much easier.

In comparison just 30% of Personal Contract Hire (PCH) schemes have some of these benefits included as standard.

Another appealing aspect is scheme accessibility. As the employer is responsible for providing the scheme, employees aren’t subjected to personal credit checks, making it easier for more drivers to transition to electric without having to overcome additional financial hurdles.

Benefits for Employers

Salary sacrifice schemes also offer substantial benefits for employers such as improved talent retention and recruitment as well as lower employment costs.

Many EVs and Ultra Low Emission Vehicles (ULEVs, such as plug-in hybrids) generate over £1,000 in NIC saving per employee annually and that’s even when you consider the higher employer National Insurance Contributions set to be launched in April 2025.

The impressive growth in salary sacrifice, compared to the overall decline for PCH schemes, reflects its effectiveness in making EVs more accessible to a broader audience. At the same time, it makes a major contribution to a company’s overall sustainability objectives by encouraging greater EV adoption across its entire headcount.

If you’re considering driving an EV, Tusker’s salary sacrifice scheme provides an inclusive, financially beneficial way to drive electric.