Salary Sacrifice
A concierge service for all
Salary Sacrifice
A Smarter Employee Benefit
Salary sacrifice car schemes offer a highly tax-efficient way for employees to access electric and plug-in hybrid vehicles.
They’re an attractive benefit that helps organisations recruit, reward, and retain top talent—all while supporting environmental goals.
The scheme is free to set up, easy to manage, and gives employees access to a wide selection of low-emission vehicles.
How much can i save as an employee?
Or find out how much you can save as an employer here.
What is salary sacrifice?
How It Works and Why It’s Effective
With salary sacrifice, employees can save up to 40% on the cost of a brand-new electric vehicle. It’s one of the most affordable ways to make the switch to electric today.
Under the scheme, an employee agrees to give up a portion of their gross salary in exchange for a fully maintained and insured EV or plug-in hybrid. Because this amount is deducted before tax, employees save on income tax and National Insurance. The only additional cost is Benefit-in-Kind (BiK) tax on the vehicle.
For employers, the scheme is cost-neutral. It reduces National Insurance contributions and supports carbon reduction goals—while also enhancing your employee value proposition.
Brand new car of your choice
Roadside Assistance
Servicing, repairs & Maintenance
Replacement Tyres
What can be tailored in your scheme?
Optional add-ons:
- Early termination protection
- Fully comprehensive insurance
- Grey fleet management
Finance to suit you
Pros and Cons
Getting a car through a salary sacrifice scheme has advantages and disadvantages. How you weigh these is a matter of preference and circumstances.
The Tax Benefits of salary sacrifice
While salary sacrifice can offer great savings, the extent depends on the vehicle’s emissions. Generally, the cleaner the car, the better the tax outcome—making EVs the most rewarding option.
How does tax work in a salary sacrifice car scheme?
Your gross salary is reduced to cover the cost of the car. This means you pay less income tax and National Insurance. Your employer pays National Insurance on the benefit instead.
You’ll pay BiK tax on the value of the benefit, which is deducted through PAYE. The amount of BiK tax is determined by:
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The higher of your sacrificed salary or the BiK-calculated value of the car
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The car’s CO₂ emissions
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The car’s list price
Benefit-in-Kind tax on salary sacrifice car schemes
For low-emission vehicles, the BiK percentage is much lower—just 3% for the cleanest EVs in 2025, compared to up to 37% for the most polluting models. This dramatically lowers your tax liability.
EVs: A Tax-Efficient Choice
Thanks to a 2017 reform, ultra-low-emission vehicles (ULEVs—those emitting under 75g CO₂/km) are exempt from the rule that taxes must be based on the higher of the two valuation methods. This means electric vehicles are taxed using the more favourable BiK rate—making them a smart and sustainable choice for salary sacrifice.
How to calculate the value of the company car
The most important factors when determining the value of a company car are:
- The CO2 emissions of the vehicle
- The list price of the car
The system further favours cars with low CO2 emissions by multiplying the car’s list price with a percentage based on emissions to find the value of the benefit. In 2025, the rate is 3% for the cleanest cars and 37% for the most polluting category.
Low emissions significantly reduce the value, which means less tax for you.
HMRC has made a calculator to help you determine the benefit-in-kind value of a company car. Fair warning: you might want to grab a cup of tea before you begin.
