Jack Cameron
03 June 2025
The growing popularity of Electric Vehicle (EV) Salary Sacrifice Schemes has sparked a common misconception among both employers and employees: that these schemes are only beneficial to higher-rate taxpayers.
This couldn’t be further from the truth. While it’s true that the more tax you pay, the more you can potentially save, the reality is that anyone who pays income tax stands to benefit. Let us explain:
EV Salary Sacrifice and your tax
Before we dive in, let’s briefly recap how the scheme works.
The EV Salary Sacrifice Scheme allows you to pay for all the costs of your electric car, including leasing, insurance, maintenance, breakdown cover, and more, before tax and National Insurance are deducted from your salary. By using your gross salary rather than your net (take-home) pay, you can save anywhere from 30% to 60% on the cost of driving an electric vehicle, depending on your tax band.
Put simply, your taxable income appears lower on paper, which means you pay less income tax and National Insurance overall.
Now, it’s true that those in a higher tax bracket tend to see the largest savings in absolute terms (pounds and pence). But even if you’re in the basic 20% tax band, you’ll still benefit significantly. Many drivers in this bracket save 30–40% off the typical monthly lease price of an EV.
So, as long as you’re paying tax, you’re saving money. It really is that straightforward.
What kind of people sign up for the Scheme?
We can only speak from our own experience, but our EV Salary Sacrifice clients represent a broad range of ages, roles, and salary levels.
Remember, the purpose of an EV Salary Sacrifice Scheme is to make electric vehicles more accessible to working people. It’s more than a “tax hack” or a well-kept executive secret.
Employees looking to enrol will need to:
- Be paid via PAYE;
- Be on a permanent employment contract;
- Have completed their probationary period; and
- Still earn above the National Living Wage after the salary sacrifice deduction is applied.
It’s always worth checking with your employer first to see if your company offers the Scheme and what internal eligibility requirements may apply. We also conduct thorough affordability checks as part of the sales process. These aren’t aimed at exclusion, but ensuring the Scheme is a good fit for you financially.
How much could I save with EV Salary Sacrifice?
The best way to understand the value of the scheme is to look at a real-world example. The average UK salary, according to the latest data from the Office For National Statistics, is £37,430. Using this as a starting point, we can generate a personalised quote on an electric vehicle to see exactly how much you could save.
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This illustrates just how effective the scheme can be, even for someone who doesn’t fall into the higher tax brackets.
Why EV Salary Sacrifice benefits everyone
The benefits of EV Salary Sacrifice go far beyond just individual tax savings. For employees, it offers a simple, cost-effective way to drive a brand-new EV. Monthly costs are often significantly lower than traditional leasing or finance options, and there’s no need for an upfront payment. It’s that simple, really.
