Switching to an electric vehicle (EV) has never been more affordable, thanks to salary sacrifice schemes. Whether you’re an employee looking to cut costs on your next car or an employer keen to offer a tax-efficient benefit, salary sacrifice makes EV ownership simple and cost-effective. With Benefit-in-Kind (BiK) rates at just 3% from April 2025, there’s no better time to go electric.
What Is a Salary Sacrifice Scheme?
A salary sacrifice scheme lets employees lease a brand-new electric car by exchanging a portion of their gross salary. This reduces their taxable income, meaning lower Income Tax and National Insurance contributions, and bigger savings.
For employers, it’s a cost-neutral way to offer an attractive staff benefit while reducing National Insurance payments.
It’s a win-win for businesses and employees alike!
How Does Salary Sacrifice Work?
How salary sacrifice works is simple:
- Choose Your Electric Car: Pick from a wide range of EVs, from affordable hatchbacks to luxury models.
- Salary Reduction: A fixed amount is deducted from your gross salary each month.
- Enjoy the Savings: Pay less tax and drive a brand-new EV with no upfront costs.
All-Inclusive Packages
Your contract includes maintenance, servicing, breakdown cover, tyres, insurance, and more.
No deposit. No hassle. Just lower costs and a greener way to drive.
Why Choose Salary Sacrifice in 2025?
Salary sacrifice isn’t just a great way to save, it’s the most cost-effective way to drive electric. With Benefit-in-Kind tax rising by just 1% a year until 2028, it offers the lowest company car tax rate available. Employees can save up to 40% compared to a personal lease, thanks to reductions in Income Tax and National Insurance.
Unlike traditional leasing or buying, there are no upfront costs or deposits, making the switch to electric even more accessible. The scheme includes everything you need in one simple monthly payment, so there are no hidden surprises. The only thing you need to worry about is the charge! Plus, with home charging, drivers can run their EVs for just a few pence per mile, a fraction of the cost of petrol or diesel.
If you’re an employer looking to green your business, get in touch below and find out more. Or if you’re an employee looking to green your rid, ask us about our referral scheme and reap the benefits for introducing your business!
Employers Introducing the Scheme
Employees Going Green
What’s New in 2025?
The electric vehicle market is evolving rapidly, making salary sacrifice an even more attractive option this year. There are now more EV choices than ever, from budget-friendly models to high-performance electric cars, ensuring there’s a vehicle to suit every driver.
The UK’s charging infrastructure has also expanded significantly, with over 60,000 public chargers, including ultra-rapid stations for a speedy charge. Looking for somewhere to top up? Check out Fleet Evolution’s EV Charge Map here!
Government incentives remain in place, with continued support for low BiK tax rates and grants for home chargers, further reducing costs for drivers. At the same time, employer demand for salary sacrifice schemes is growing, making EVs accessible to more employees while helping businesses meet sustainability goals.
Employer Benefits: A Cost-Neutral, Sustainable Perk
For employers, salary sacrifice is a powerful tool to attract and retain top talent while improving sustainability.
- Cost-Neutral Benefit: There’s no direct cost to the business, just savings on National Insurance.
- Boost Employee Retention: Offer a desirable perk that saves staff money.
- Meet Sustainability Goals: Reduce your company’s carbon footprint and support net-zero targets.
- Enhance CSR Initiatives: Demonstrate your commitment to green transport and responsible business practices.
With more businesses focusing on Environmental, Social, and Governance (ESG) policies, salary sacrifice is a simple way to support sustainability while benefiting your workforce.
Who Can Use a Salary Sacrifice Scheme?
Salary sacrifice is open to most employees, but there are a few key requirements:
- You must be paid above minimum wage after deductions.
- The scheme must be set up by your employer.
- The car is for personal and business use, so it’s perfect for commuters and remote workers alike.
If you’re an employer, setting up a scheme is straightforward, with no complicated admin or financial risks. Head straight to our Set Up Your Scheme page here if you’re ready to go ahead!
April 2025 Salary Sacrifice Changes
From April 2025, EV drivers will start paying road tax for the first time. It seems like a step in the wrong direction, but costs will remain lower than for petrol and diesel cars. Find out more about the April changes in our blog here.
It’s important to remember that, these changes can make salary sacrifice more valuable than ever. By reducing overall costs through reduced tax and National Insurance contributions, while still benefiting from low running costs, you might be in the green.
Is It Worth It in 2025?
Absolutely. With petrol and diesel prices fluctuating, more EV options available, and Benefit in Kind staying low until 2028, salary sacrifice is the most affordable way to switch to electric. It’s cost-effective, convenient, and better for the planet.
Start Saving Today
Ready to cut costs and drive electric? Whether you’re an employer looking to set up a scheme or an employee eager to get behind the wheel, we make the process simple.
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.