Employer's Guide: How to Set Up an EV Salary Sacrifice Scheme

Employer's Guide: Setting Up an EV Salary Sacrifice Scheme

As an employer, offering an EV salary sacrifice scheme is one of the easiest and most cost-effective benefits you can provide. Here's your complete setup guide.

Why Offer EV Salary Sacrifice?

It Costs You Nothing

• Free to set up with all major providers
• No ongoing subscription fees
• The provider handles everything

You Actually Save Money

• Employer NI savings: 13.8% on every pound of salary sacrificed
• Example: If 10 employees sacrifice £500/month each, you save £8,280/year in employer NI
• Some providers offer additional employer rebates

Employee Benefits

• Top-3 most requested employee benefit in the UK
• Improves retention (employees commit for 2-4 year lease terms)
• Attracts talent in competitive job markets
• Demonstrates ESG commitment

Step-by-Step Setup Process

Step 1: Choose a Provider (Week 1)

Compare providers based on:

• Your company size
• Vehicle range they offer
• What's included (insurance, charger, maintenance)
• Employee support and portal quality
• Onboarding speed

Most employers shortlist 1-2 providers and request demos.

Step 2: Legal Framework (Week 1-2)

• Provider supplies template salary sacrifice agreements
• Your legal/HR team reviews (usually straightforward)
• Ensure your existing employment contracts allow salary sacrifice
• Check pension scheme implications

Step 3: Payroll Setup (Week 2-3)

• Simple monthly deduction from gross pay
• Provider guides your payroll team through setup
• Test with a pilot group if preferred
• Most modern payroll systems handle this easily

Step 4: Employee Communication (Week 2-3)

• Provider typically supplies launch materials
• Hold a launch webinar or town hall
• Share the savings calculator link so employees can see their potential savings
• Designate an internal champion

Step 5: Go Live (Week 3-4)

• Employees can start browsing and ordering
• Provider handles all queries
• Typical delivery: 2-6 months after order depending on vehicle availability

Important Considerations

Minimum Wage

Salary sacrifice cannot reduce an employee's pay below National Minimum Wage. Providers automatically check this.

Pension Impact

Salary sacrifice reduces the gross salary used for pension calculations. Consider:

• Informing employees clearly
• Optionally topping up pension contributions
• Some providers offer pension protection options

Leavers Policy

If an employee leaves, standard options include:

• Employee takes over the lease personally
• Early termination fee (provider-specific)
• Transfer to new employer (if they have a scheme)

Tax Reporting

• BiK must be reported on P11D forms
• At 3% BiK rate, this is minimal paperwork
• Provider usually supplies P11D data

Cost to Expect

Net result: Most employers are cash-positive from day one.

Ready to Get Started?

1. Compare providers to find the best fit
2. Get quotes from your shortlisted providers
3. Or use the calculator to show employees their potential savings