What Is Electric Car Salary Sacrifice?

An electric car salary sacrifice scheme lets an employee pay for an electric car each month using their gross salary – that’s before tax and other contributions are deducted. It’s the same as other salary sacrifice schemes, such as childcare, cycle to work schemes or pension contributions.

Unlike some other benefits that you might take through salary sacrifice, an electric vehicle isn’t taxed based on the salary that you give up: instead you pay tax on the value of the benefit in kind (BIK) tax.

BIK is the value of the benefit you receive – in this case, a car. It’s what has helped make salary sacrifice the cheapest way to own an electric car. For battery-electric cars, BIK tax is 1% for 2021/22, and 2% for 2022/23.

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If you are interested to know more about salary sacrifice car lease or wish to speak to one of our salary sacrifice specialists please fill in the forms below and we will contact you shortly. 

*If you are working in the NHS, you will be glad to know that we can help you with the NHS salary sacrifice car scheme.