How the salary sacrifice car scheme can help your staff drive electric

A salary sacrifice car scheme allows an employee to exchange part of their gross salary for the use of an electric vehicle. The deduction happens before income tax and National Insurance, which often lowers the employee’s overall costs. Employers usually save on National Insurance as well because the employee’s taxable salary is slightly reduced.

Employees pay Benefit in Kind tax because the car is treated as a company benefit. Electric vehicles have lower Benefit in Kind rates than petrol or diesel cars, which makes a ULEV salary sacrifice arrangement or salary sacrifice ultra-low emission cars more cost effective for both employees and employers.

If you want a full, step‑by‑step breakdown of how the scheme works, you can read our guide about how the salary sacrifice scheme works.

How does salary sacrifice support electric driving?

Electric vehicles attract far lower Benefit in Kind rates. HMRC sets these rates each tax year and employers should check current guidance before making decisions. Battery electric cars attract a 4% Benefit in Kind rate for the 26/27 tax year, increasing by 1% again the following year for company car drivers, which has a significant impact on affordability and is one of the reasons these schemes are popular with large organisations.

What does the scheme include?

Most schemes are structured to keep costs predictable. A typical package includes maintenance, servicing, insurance, roadside assistance and tyre replacement. These inclusions simplify budgeting for employees and reduce administration for employers.

Charging costs, home charging installation and other daily running expenses are separate. Employees choose the charging setup that suits their home and driving habits. This separation helps the scheme work cleanly at scale while still giving employees flexibility.

Many large employers now see value in offering an electric vehicle salary sacrifice car scheme. Sustainability commitments play a big part in that shift, along with the opportunity to reduce National Insurance costs and strengthen employee benefit packages. These schemes also support long term fleet plans for organisations that want to move away from petrol and diesel vehicles. If you want to understand what this could mean in practice, you can use our salary sacrifice car scheme calculator to estimate NI savings for your organisation and your employees.

Employee usage data from our Employee Benefits Impact Report shows that salary sacrifice car schemes achieve an average engagement rate of 7.22% across all industries, with the Public Sector reaching 30%, which is four times the overall average. The aforementioned salary sacrifice scheme calculator is based on the findings taken directly from our benefits platform, providing a more accurate ROI view. Explore the employee benefits impact report for the full findings about our whole range of schemes.

Financial value for employers

National Insurance savings scale in a noticeable way when the scheme is used by a large workforce. A small saving per employee becomes far more significant when hundreds or thousands of employees take part. This creates a financial return without increasing overall benefit spend.

“On one example we reviewed, 50 electric vehicles delivered potential NI savings of over £185,000 for the employer. When you scale that across a large workforce, the return can be significant. These are hard numbers that employers can build directly into their planning.”

Donna Harris, Tusker, ‘How to Future-Proof Reward with the Car Benefit Scheme’ webinar

Tusker is a market leading UK-based vehicle management and leasing company that provides Electric Vehicles (EV) and Ultra-Low Emission Vehicles (ULEV) via salary sacrifice schemes, available through our employee benefits platform.

Business Car report that fleet registrations accounted for 59.6% of all new car registrations in the UK. This reflects the wider move toward structured and benefit-led vehicle access, which aligns well with ULEV salary sacrifice arrangements and salary sacrifice ultra-low emission cars.

Employee demand and benefit attractiveness

Employees increasingly expect sustainable and accessible benefits. This is especially clear in large organisations where competition for talent is high. Research from Hays found that 72% of employers believe their sustainability commitment plays an important role in attracting new staff.

A salary sacrifice car scheme can support both recruitment and retention. It offers a practical, high-value benefit that helps employees access electric vehicles at a lower cost. For sectors where benefit packages influence hiring decisions, this can make a meaningful difference.

“It is a sticky benefit. We have employees who are on their third or even fourth car through the scheme. Our renewal rate sits at around 68%. Once people use the benefit, they tend to keep using it because the experience is straightforward and predictable.”

Donna Harris, Tusker

Large organisations with established fleets can use salary sacrifice car schemes to support broader environmental objectives. Electric vehicles contribute to cleaner travel and can be included within ESG reporting where appropriate. Some organisations choose to reference changes in Scope 1 and Scope 3 emissions when electric cars replace older petrol or diesel models. These reductions vary by fleet size and usage, so the scheme should be positioned as one part of a wider sustainability approach.

Recent data from the Team Energy Net Zero Survey shows that 49% of UK organisations have made a formal commitment to achieving net zero emissions. This trend is shaping how large businesses think about operational planning. Salary sacrifice car schemes fit into this picture because they help employees make lower-emission choices in a structured and predictable way.

Electric driving continues to grow across the UK. New data shows a clear shift in how drivers choose their next vehicle. The trend is relevant for large employers because more staff are now open to electric if the cost and access barriers are reduced through benefits such as a ULEV car scheme or a salary sacrifice low emission cars arrangement.

Recent figures show:

• 2.02 million new cars were registered in the UK in 2025 (SMMT)
• 473,348 of those were fully electric vehicles (Motoring Research)
• Electric vehicle registrations increased 23.9% between 2024 and 2025
• Electric vehicles represented 23.4% of all new car registrations in 2025

These numbers show that electric vehicles are becoming a normal choice for many drivers. Large organisations can support this shift by offering benefits that make EVs easier to access. Our data from the Employee Benefits Impact Report reinforces this trend, with organisations in sectors such as Public Sector (30% engagement) and Not for Profit (27% engagement) showing particularly strong uptake of car schemes that support electric vehicle access.

A salary sacrifice car scheme removes many of the upfront barriers and gives employees a clear route into electric driving through a predictable monthly cost. To make this real for your workforce, you can share our EV salary sacrifice savings calculator so employees can see how moving to an electric car through the scheme compares with their current costs.

Range anxiety and charging access remain common concerns for employees who are considering an electric vehicle. Many drivers want reassurance about daily usability and long‑distance travel, especially when the switch is linked to a workplace benefit. Donna Harris from Tusker explained during our ‘How to Future-Proof Reward with the Car Benefit Scheme’ webinar how common these concerns still are among employees.:

“There are still a lot of people who are not sure they are ready to go electric. The media can be very good at fuelling myths and misconceptions around charging, range and cost. People often worry about poor charging infrastructure or that it will be inconvenient, or they think the range will not suit their lifestyle. These concerns come up all the time and they are completely understandable.”

Charging availability and infrastructure

Public charging has grown quickly across the UK. Zapmap, the UK’s go-to app for find and pay EV charging report that there are 115,000+ public charge points available. This expansion gives drivers more confidence about everyday access, although availability can still vary by region.

“The infrastructure is improving all the time. We now have chargers appearing in places you might not expect. I can go to my local supermarkets or even garden centres and find charging facilities in place. Although the network still needs to grow, the progress in the last year alone has made a noticeable difference for drivers.”

Donna Harris, Tusker

Workplace charging is another area employers can explore. Government support is available through the Workplace Charging Scheme, which helps with installation costs.

Understanding running costs

Electric vehicles can be cheaper to run than petrol or diesel models. The actual cost depends on the employee’s electricity tariff and how often they charge at home, at work or on public networks. Drivers benefit most when they use off‑peak home charging or workplace charging where it is offered.

“The majority of energy providers now offer low overnight tariffs. Many range between seven and nine pence, which means you can fully charge a battery for an amount that is far lower than the cost of filling a fuel tank. People are often surprised when they realise how affordable home charging can be once they look at the numbers.”

Donna Harris, Tusker

Educating staff at scale

Large organisations often need structured support to help staff understand the shift to electric. Internal communications can be used to explain how charging works and what the real running costs look like. Intranet FAQs are useful for common questions. Benefit roadshows or drop‑in sessions can help employees understand the ULEV car scheme or salary sacrifice low emission cars options available to them.

A salary sacrifice car scheme gives large organisations a practical way to support electric vehicle uptake while keeping administration manageable. It also fits well with environmental planning and long-term workforce strategies.

Engagement varies by industry, but several sectors demonstrate especially strong results, including Information Technology where application values are 33% above average, and Financial Services where values are 26% higher than average. (Access Group Employee Benefits Impact Report)

Key benefits for employers include:

• Helps the organisation meet environmental and sustainability goals, including wider carbon‑reduction plans
• Creates National Insurance savings that scale as more employees take part
• Low overall cost to introduce and operate, since most tasks are managed by the provider
• Appeals to a broad workforce and supports high engagement with employee benefits
• Strengthens employer brand by showing a visible commitment to sustainability
• Reduces administrative pressure because providers handle ordering, delivery, maintenance arrangements and support

Employees gain access to electric vehicles in a way that keeps costs predictable and removes much of the complexity associated with traditional car ownership.

Key benefits for employees include:

• Access to new electric vehicles at competitive prices that are often lower than high‑street finance
• Lower tax and National Insurance payments due to the salary sacrifice arrangement
• Opportunity to reduce personal carbon emissions through everyday travel
• Convenience of an all‑inclusive package that covers servicing, maintenance, insurance and breakdown support
• Simple ordering process with a large choice of vehicles

Many employees understand the value more clearly once they have run their own numbers using a salary sacrifice car savings calculator that shows the tax and NI impact on their take‑home pay.

Smooth rollout is important for large organisations so employees understand how the scheme works and feel confident using it. Introducing the scheme through our employee benefits platform keeps the process simple because the platform manages applications, communications and approvals in one place.

Steps to set up

Large employers can introduce the scheme through a straightforward process. The main steps involve selecting a provider, confirming payroll arrangements and setting the benefit policy. When the scheme is delivered through an employee benefits platform, much of the work is handled automatically through built‑in workflows and templates.

Clear internal communication supports employees by explaining eligibility, costs and how to request a vehicle.

“It is a light‑touch benefit for employers. We take on the majority of the administration and support so HR teams do not need to handle day‑to‑day tasks. The aim is to remove friction so organisations can offer the scheme without creating extra workload.”

Donna Harris, Tusker

Supporting employees through the transition

Employees benefit from practical guidance when they are moving to electric. Organisations often use internal guides, FAQs, webinars or in‑person events to explain how charging works and what running costs look like. The employee benefits platform helps by hosting all information in one place so employees can refer to it whenever they need. Workplace charging adds further support where it is available.

“Every scheme launch is supported with marketing materials and clear communication. Larger clients have a dedicated marketing executive, and smaller organisations can access a marketing hub at any time. The purpose is to help employees understand the benefit clearly so the employer does not have to field every question.”

Donna Harris, Tusker

Measuring impact

Tracking results helps employers understand how the scheme is performing. Uptake, National Insurance savings and environmental contributions can all be reviewed at regular intervals. Real‑time dashboards within the employee benefits platform give HR and Reward teams an easy way to monitor usage and report on outcomes.

“We provide CO2 reporting for Scope 3 and detailed usage insights so employers can see how the scheme is performing. This helps organisations feed real data into ESG reporting and reward evaluation. Many employers want this information to support wider sustainability and workforce planning.”

Donna Harris, Tusker

Salary sacrifice gives large organisations a practical way to support electric driving while keeping costs predictable. It delivers measurable National Insurance savings, helps employees access electric vehicles at a lower price and contributes to wider sustainability goals. The scheme is simple to run and fits naturally into modern benefit strategies for large workforces.