How does the salary sacrifice car scheme work?

87% cite non-electric vehicles as one of their most popular modes of transport, while 18% also cite electric vehicles as a popular option, according to research by Aviva.

With a large number of people commuting via a car or other owned vehicles, addressing the needs of drivers can help them feel supported, for example with the increase in fuel prices.

Introducing a salary sacrifice car scheme can help with the cost of running a car and help make the commuting experience easier with a safe, reliable vehicle.

The car scheme allows employees to get their hands on a brand-new car, which is paid for through repayments from their monthly salary.

To make the benefits go further, employees save on their National Insurance and Tax payments.

How does the car scheme work for and benefit employees?

One benefit of the car scheme is the flexibility of what’s on offer. Whether an employee is looking for a small car to get them around or a bigger family car- there is something for everyone.

Electric vehicles are also available through the scheme, so employees can opt for an eco-friendlier car should they wish.

Another benefit of the salary sacrifice car scheme is that employees save on NI and tax. As they pay for their new car through repayments from their monthly salary, they pay less National Insurance and Tax.

How does the car scheme work for and benefit employers?

Implementing the car scheme not only has many benefits for your employees but also for you as the employer and the company overall.

Firstly, as many of your employees will drive, the scheme is likely to be highly popular amongst employees, meaning that your company return on investment will be higher.

As well as being a popular scheme amongst your current employees, a car scheme can help you to attract new talent.

Since the beginning of the pandemic, employees have become more vocal about what they want from their job.

Lots of employees have been looking for employment elsewhere if their current employer doesn’t provide what they need.

As an employer, you are likely to be looking at all of the ways that you can retain your employees. One thing you can do to help retain your employees is look at the employee benefits that you offer.

The employee benefits that are offered to your employees become a big part of their experience of working at your company.

If you can offer employee benefits that help fulfil the needs of your employees, then this can help boost your employee engagement and satisfaction levels which in turn should improve the company employee retention level.

This spreads even further when you consider the green benefits of the car scheme. You can promote the environmental benefits of the scheme to your employees, and this will add to its appeal.

Another big benefit of running the car scheme for you as an employer is how easy it is to manage.

Running the car scheme through an employee benefits provider means that most of the administration for the scheme is taken care of. The addition of an employee benefits platform makes it even better because everything is in one easy to use place.

 

Are salary sacrifice schemes worth it?

Although we’ve focused on the salary sacrifice car scheme in this article, there are some other great options out there. For example, a holiday trading scheme, which allows employees to buy more annual leave through their salary.

Whilst the specifics of salary sacrifice schemes differ, they all save employees money and provide tangible benefits in return. For you the employer, they’re popular, easy to use and easy to manage if you find the right provider.

So, if you’re looking for a way to retain your employees and keep your employee satisfaction levels high then salary sacrifice schemes could be a great offering for your company.

If you’d like to hear more about how salary sacrifice schemes can help your employees and your company, then get in touch.