10 Reasons Your Workplace Should Embrace Salary Sacrifice on EVs

Did you know that only 15% of HR managers are aware of salary sacrifice schemes for vehicles, particularly electric ones?

Rivervale asked their 90K YouTube followers about this and discovered that a staggering 75% had no idea these schemes existed. That means only a quarter of people are privy to the incredible benefits available.

So, why should your organisation take an interest? Let’s explore why salary sacrifice schemes for EVs could be the best decision your workplace makes.

1. Employee Appreciation

For employees:

A little appreciation goes a long way. Offering access to a brand-new car that might otherwise be out of reach, coupled with financial perks, makes employees feel valued.

For employers:

Recognition fosters loyalty. Valued employees tend to give back through dedication and productivity. Ignore appreciation, and risk the consequences — 43% of employees admit feeling demotivated when they feel unseen.

2. Reduced National Insurance (NI)

For employees:

With salary sacrifice, employees reduce their gross salary before tax, which lowers NI contributions. For instance, sacrificing £300 from a monthly wage of £2,625 means paying NI on £2,325 instead of the full amount—saving £36 per month.

For employers:

Employers benefit too, as they also pay reduced NI contributions on employees’ adjusted salaries. It's a win-win.

3. Reduced Tax

For employees:

Similarly, less gross salary means paying less income tax. Using the earlier example, a £300 reduction in gross salary saves £60 in tax.

For employers:

Helping employees save on their second-largest expense—tax—shows a proactive, supportive stance, building mutual respect and loyalty.

4. Lower Company Car Tax

For employees:

While employees financing EVs via salary sacrifice do pay company car tax, the rates are dramatically lower for EVs.

The Benefit-in-Kind (BIK) rate for EVs is just 2% (2024/2025), compared to up to 37% for traditional vehicles.

A £30,000 EV costs £600 annually in BIK tax versus £11,100 for a comparable diesel vehicle.

For employers:

A financially sound workforce is a more stable one. Employers that help employees cut costs on essentials like transport are less likely to face high turnover.

5. Reducing Carbon Footprints

For employees:

Switching to an EV is an active step towards lowering personal CO² emissions. Plus, EVs are the future, with growing support compared to internal combustion engine (ICE) vehicles.

For employers:

Promoting green initiatives enhances employee well-being and mental health. A positive impact on the planet often translates to a positive mindset at work.

6. Exemption from ULEZ

For employees:

Clean Air Zones and Ultra Low Emission Zones (ULEZ) are expanding across the UK. EVs are exempt, saving drivers up to £12.50 daily or £4,562.50 annually in congestion charges.

For employers:

Employees who save on commuting costs are less likely to feel financial strain, which fosters loyalty and satisfaction.

7. Enhanced Employee Loyalty

For employees:

Salary sacrifice schemes demonstrate that employers care about individual needs. This mutual trust encourages employees to remain loyal.

For employers:

Retaining staff is far more cost-effective than recruiting and training new hires. The average cost of replacing an employee is £30,000. Keeping three loyal employees saves £90,000!

8. A New Car for Less

For employees:

Between reduced tax, NI contributions, and EV-specific perks, employees can drive a brand-new car for significantly less money.

For employers:

Offering such benefits distinguishes a workplace from competitors, aiding both recruitment and retention.

9. Early Termination Insurance

Life happens, and plans change. Rivervale provides Early Termination Insurance (ETI) to cover scenarios like resignation, long-term illness, maternity leave, or loss of driving licence.

For both parties:

ETI provides peace of mind. Employees feel secure, and employers avoid dealing with complicated situations when life’s unpredictability strikes.

10. No Credit Check

For employees:

Not everyone has a spotless financial history. Salary sacrifice schemes bypass credit checks, giving everyone a fair shot at participating.

For employers:

This inclusive policy boosts morale and further enhances employee loyalty. A little understanding from the employer can make a world of difference.

Why your workplace should offer Salary Sacrifice Schemes on EVs

Is this the right move for your organisation? Considering the savings, loyalty, and well-being it fosters, the answer seems obvious.

Sometimes, spending a little upfront reaps massive rewards in the long term.