If you’re thinking about getting an electric car, you might be wondering if a salary sacrifice scheme is the right way to do it. With low Benefit-in-Kind (BiK) tax rates, increasing fuel savings, and an all-inclusive package, it’s one of the most cost-effective ways to drive a brand-new electric vehicle. But here’s the question, are salary sacrifice schemes still worth it in 2026?
For many employees, a salary sacrifice car scheme can be worth it, especially when choosing an electric car. The main benefits are lower Income Tax and National Insurance, low Benefit-in-Kind tax on EVs, no upfront cost and fixed monthly motoring costs. However, it may not be suitable if salary deductions take pay close to National Minimum Wage, if you expect to leave your employer soon, or if the scheme affects pension or salary-linked benefits.
As government incentives continue, more electric car models hit the market, and charging infrastructure improves, the case for salary sacrifice schemes is stronger than ever.
Let’s break it down and explore the pros, cons, and everything you need to know.
What is a Salary Sacrifice Scheme?
A salary sacrifice scheme is a way for employees to lease an electric car through their employer by sacrificing part of their gross salary before tax and National Insurance (NI) are deducted. This reduces taxable income, resulting in significant tax savings.
Here’s how it works in three simple steps:
- Choose your car: Pick a brand-new (or stock, or used!) electric vehicle from the available options.
- Salary reduction: Your employer deducts a fixed monthly amount from your pre-tax salary.
- Drive & save: Enjoy the car with maintenance, insurance,, servicing, and more included.
Since the cost comes out of your gross salary, you pay less tax and NI, making the scheme far cheaper than a personal lease or loan. The salary sacrifice car calculator shows you first-hand!
The Key Benefits of a Salary Sacrifice Scheme in 2026
Huge Tax Savings
Because the cost is deducted before tax, employees save on income tax and NI contributions.
For example, a 40% taxpayer could save thousands per year compared to leasing the same car privately.
Low Benefit-in-Kind (BiK) Tax
BiK tax rates for electric cars remain low at just 2%, rising by 1% a year until 2028, making it far cheaper than petrol or diesel alternatives. For comparison, a petrol company car could have a BiK rate of around 33% or more, significantly increasing monthly costs.
No Upfront Costs
Unlike a personal lease or loan, there’s no deposit required. Employees simply exchange part of their salary for a car and start driving.
All-Inclusive Package
Our salary sacrifice scheme covers:
- Insurance
- Servicing
- Maintenance
- Tyres & windows
- Breakdown cover
This means there are no unexpected costs, just one simple monthly payment.
Cheaper Running Costs & No Credit Checks
Electric cars are far cheaper to run than petrol or diesel vehicles. Charging at home can cost as little as 2p per mile, while public rapid chargers are still significantly cheaper than fuel.
Since the scheme is managed by the employer, employees don’t need to go through credit checks or financing applications. This makes it an accessible option for many workers.
Greener & More Sustainable
Switching to an electric car reduces CO2 emissions and helps companies improve their green credentials. Many businesses now prioritise sustainability, making salary sacrifice schemes a great way to lower their carbon footprint while offering employees real financial benefits.
We also offer CO2 reporting, a soon-to-be requirement for businesses, so we’ll keep you in the know abot how much carbon you’re saving, both company-wide and driver specific!
So, whether you’re an employer looking to green your fleet, or a driver ready to take a ride on the green side – get in touch with the team below!
Employers Introducing the Scheme
Employees Going Green
What’s New for Salary Sacrifice Schemes in 2026?
More Electric Models to Choose From
Car manufacturers are launching more electric vehicles than ever, with improved range, faster charging, and lower costs. From budget-friendly models like the MG4 to premium options like the BMW i4, there’s something for everyone.
Better Charging Infrastructure
The UK now has over 60,000 public chargers, including more rapid chargers than ever. Workplace charging is also expanding, with many employers offering free or subsidised charging to their staff.
If you want to know where to find charging hubs across the UK, check out our homemade UK Charge Map here.
Strong Resale Values
Used electric cars have held their value well, meaning leasing costs remain competitive in 2026.
Is Salary Sacrifice Right for You?
A salary sacrifice scheme is a great option if:
✅ You’re a PAYE employee (not self-employed).
✅ Your employer offers the scheme.
✅ You drive regularly and want to save on fuel & maintenance.
✅ You’d rather lease a car than buy outright.
✅ You want fixed monthly costs with no unexpected expenses.
However, it might not be suitable if:
❌ You plan to leave your job soon: Early termination fees may apply.
❌ You’re on minimum wage: Salary sacrifice cannot reduce pay below the National Minimum Wage.
❌ You prefer to own a car outright rather than lease.
For most employees, the tax savings alone make salary sacrifice a far cheaper option than personal leasing or buying with finance.
Common Concerns: Debunked | Are Salary Sacrifice Schemes Worth It?
“I’ll lose too much of my salary.” – The salary reduction is offset by tax and NI savings, so your take-home pay is often only slightly lower, but you gain a brand-new car.
“I’ll have to pay company car tax.” – Yes, but electric cars have a BiK tax rate of just 2%, which is far lower than petrol or diesel cars.
“I won’t be able to leave my job.” – If you leave your job, the scheme can be transferred to a new employer (if they offer one), or you can pay a settlement fee to return the car.
“Salary sacrifice is only for high earners.” – Even basic rate taxpayers save money, though higher-rate taxpayers see the biggest tax benefits.
How to Set Up a Salary Sacrifice Scheme
Common Myths About Salary Sacrifice Schemes
For Employees:
- Check if your employer offers a scheme. If not, encourage them to explore one!
- Choose your car – Pick from available electric models.
- Sign the agreement – Your employer will set up the deductions.
Head over to our Employee Zone below for more information.
For Employers:
- Partner with a provider like Fleet Evolution.
- Set up payroll deductions for participating employees.
- Offer a hassle-free, tax-efficient perk that boosts employee retention.
Head over to our Employer Zone below for more information.
Final Verdict: Are Salary Sacrifice Schemes Worth It in 2026?
You’ll be shocked to find that, we think salary sacrifice schemes are worth it! With low BiK tax rates guaranteed until 2028, significant savings on tax & NI, no upfront costs, all-inclusive running costs, and more electric models to choose from than ever – there’s never been a better time to go electric!
Salary sacrifice remains one of the cheapest ways to drive a brand-new electric car. If your employer offers it, it’s well worth considering. And if they don’t why don’t you check out our referral program? Get your company on the scheme, and we’ll reward you for it! Get in touch below for more information.
Get in Touch
Fleet Evolution offers innovative salary sacrifice schemes, helping employers and employees save on costs while promoting eco-friendly electric cars. Enjoy easy setup, free maintenance, and swift activation for any company size.