What are the benefits of car salary sacrifice?

Tax savings - If you’re the employee, the most appealing benefit of salary sacrifice schemes is that you can avoid paying a significant amount of tax and National Insurance. This depends on how much you earn, with higher earners saving the most – especially if the reduction in salary means you move down from the higher rate of tax bracket.

Lower monthly payments - Another significant car salary sacrifice benefit is that you can lease a car for less than if you took out a personal lease. This is because business car leases aren’t subject to VAT, meaning you can save 20% on your agreement.

No deposit required - Most car salary sacrifice schemes allow you to lease a car without having to put down a deposit. As well as saving you a sizeable chunk of cash up front, this also means monthly payments are higher than if you put in a deposit. This in turn maximises your savings from the scheme.

Reduced fuel costs - Simply EVs are cheaper to run than petrol and diesel cars - especially if you can charge at home with a professionally installed home charger. This allows you to make savings on your daily running costs.

Access to wider choice of electric vehicles - It may be the case that you can choose from a wider range of cars through a salary sacrifice scheme. Lower monthly payments could open up more luxurious vehicles to your budget, while you may also benefit from fleet discounts if you work for a large company.

Wrap a home charger into your salary sacrifice - It isn't just an EV lease that can be part of our salary sacrifice scheme, you can also wrap in the cost of a home charger, meaning even bigger savings.

Lower National Insurance contributions - If you’re an employer asking yourself ‘what is the benefit of salary sacrifice?’, the most obvious advantage is that you can reduce your National Insurance contributions. This can be a significant saving, especially when you have numerous employees enrolled on a scheme.

Increased employee satisfaction - Benefit schemes can be incredibly popular among employees. Saving money on tax, driving a better, brand new car – what’s not to love?

Reduced employee turnover - With the higher levels of employee satisfaction comes reduced turnover of staff. As well as retaining your most talented assets, this also reduces recruitment and training costs.

Enhanced company image - Benefit schemes can make your company more attractive to potential new recruits. It can also boost your company’s reputation when you run a car salary sacrifice scheme on electric cars.

Reduced admin costs - You company can save on both time and money when you arrange your salary sacrifice scheme through a provider like DriveElectric. This is because we can not only source and deliver vehicles to your employees, but also help to organise servicing, maintenance and repairs.