Salary sacrifice is an increasingly popular way to drive an electric car in the UK. If you're an employee looking to save money on a brand-new EV, or an employer offering greener benefits, this guide breaks it all down clearly.
Looking for trusted car leasing companies? We work with leading UK providers to deliver affordable EV lease options for businesses and individuals.
What is Salary Sacrifice for Car Leasing?
Salary sacrifice is a government-backed scheme where employees agree to give up a portion of their gross salary in exchange for a non-cash benefit—like an electric vehicle lease. The payments come out before tax and National Insurance, making it extremely tax-efficient.
It’s only available for zero-emission vehicles (like EVs) and is typically arranged through an employer in partnership with a leasing provider.
How Does EV Salary Sacrifice Work?
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You choose an electric car you’d like to lease.
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Your employer arranges the lease through a provider.
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The monthly cost is deducted from your gross salary.
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You save on income tax and National Insurance.
Since EVs currently benefit from just 2% Benefit-in-Kind (BiK) tax, the total savings can be substantial.
Benefits of EV Salary Sacrifice Schemes
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Huge tax savings – Pay less tax and National Insurance
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All-inclusive – Insurance, servicing, breakdown cover often included
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Drive brand-new electric cars – Upgrade every 2–4 years
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Zero upfront payment – No deposit required
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Reduce your carbon footprint
Discover the latest EV car leasing UK options for employees and businesses.
Eligibility and Considerations
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Must be employed by a company offering the scheme
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Salary must not fall below National Minimum Wage after deductions
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Usually requires a fixed contract period (e.g. 2–4 years)
Employers should also review any insurance, mileage, or early return policies with the lease provider.
Is Used EV Leasing Available on Salary Sacrifice?
Currently, most salary sacrifice schemes apply to new electric cars, but a few car leasing companies now offer used EV lease options too—ideal for budget-conscious businesses or employees.
Why Employers Offer It
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Helps attract and retain top talent
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Reduces fleet emissions and supports CSR goals
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No cost to business (typically cost-neutral)
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Enhances staff benefits package
Ready to go electric and save? Explore our latest EV car leasing UK offers and talk to your employer about setting up a salary sacrifice scheme today.
FAQs – Salary Sacrifice for EVs
No, the lease provider owns the vehicle. It is returned at the end of the term.
Yes, many schemes include Teslas and other premium EVs, depending on the provider.
Each provider has different policies. Some include early termination protection; others may charge a fee.
It’s uncommon, but some car leasing companies are starting to offer this under specific conditions.
Most salary sacrifice EV schemes are all-inclusive, covering servicing, insurance, and breakdown assistance.