What do employees actually think about Salary Sacrifice?
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The questions they're asking based on our conversations with employees across Essex, Suffolk and Norfolk
There is usually a pattern to the way salary sacrifice conversations go with employees, and it’s remarkably consistent whether we’re in a meeting room in Chelmsford, a breakout area in Ipswich or a professional services office in Norwich.
It starts with curiosity and a not insignificant dose on mild sceptism. Somebody has heard about salary sacrifice from a colleague, an email from HR, a conversation at home or social media and they’re curious but cautious. The savings surely sound too good to be true so there must be a catch.
We run regular ‘pop-up’ sessions with employees at businesses across Essex, Suffolk and Norfolk – simple informal conversations where people can ask anything about switching to electric vehicles, range, how salary sacrifice works, what is means to them personally. They leave with a clearer understanding in line with their personal circumstances and enabling them to make a more informed and confident decision.
The questions in this article are drawn from these conversations with a mix of practical, financial and even electric vehicles themselves – and some are simply from employees whose employers don’t yet have a scheme but who very much want one.
According to the BVRLA’s Q4 2025 Leasing Outlook, salary sacrifice vehicle registrations increased by 125% year on year, now reaching approximately 225,000 cars. Tusker, one of the sector’s leading national providers, has noted that this growth is now predominantly employee-driven.
People are asking their employers to set up schemes and the questions below highlight why.
The scheme questions: how does this actually work?
What am I signing up to exactly?
You’re agreeing to give up a portion of your gross salary before income tax and National Insurance are calculated in exchange for the use of a fully maintained and insured electric car. Your employer leases the vehicle on your behalf, and the cost comes out of your pay before tax and NI deductions are made.
The company also reclaims 50% of the VAT on the finance rental and 100% of the VAT on the service rental – savings you can’t make if leasing the car personally and as you are paying with pre-tax salary, you’re effectively getting a reduction in income tax and NI. A basic rate taxpayer therefore effectively saves up 28–32% and a higher rate taxpayer saves considerably more and often as much as 40-50%.
You have to pay benefit in kind tax on the car because for the purposes of HMRC they class it as a company car – however as the BIK rate is so low at just 4% in the 2026-27 tax year the total savings a significant.
You also pay a small amount of Benefit-in-Kind (BiK) tax on the car — because HMRC classifies it as a company car. For electric vehicles, that BiK rate is just 4% of the car’s P11D value in 2026/27.
Example: On a Renault 5 E-Tech 110kW Iconic Five Comfort Range 52kWh 5dr Auto the taxable benefit is c.£1,200 a year leaving a basic rate taxpayer paying just £240 in company car tax annually – or just c.£20 each month.
The BIK tax payable pales into insignificance when compared with the potential savings.
What’s actually included in the monthly payment?
There isn’t a universal list of what is and isn’t covered as different providers include different elements so it is always worth fully understanding before deciding:
Below is what is included by most providers:
- The vehicle lease itself
- Fully comprehensive business use insurance
- Full servicing and maintenance
- Tyre replacement (subject to fair use policy)
- Breakdown and roadside recovery
- Road tax (VED)
- Early termination protection – different levels of cover will exist.
Some providers also include a home charger installation and some manufacturers include this as part of the contract hire deal.
It is also worth remembering that the fully comprehensive insurance automatically covers the employee for business use and up two additional drivers can usually be added.
The question worth asking at a pop-up session or certainly before signing anything is: ‘What would I have to pay for separately?’ If the answer is longer than a short list, look more carefully at the small print.
How much will I actually save?
There are a number of factors that will determine how much you actually save – not least the starting contract hire rate from your provider … this is where some schemes can stall if the initial rate itself isn’t competitive.
After this it depends mainly on your tax rate and how your employer handles the National Insurance saving the scheme generates. Some pass the full savings to the employee … some a proportion of the savings and in some schemes the provider takes the NI savings as a management fee to operate the scheme.
Below is an example of the savings comparison for a 20% and 40% tax payer taking a salary sacrifice against the best PCH deal in the market place.
The only way to get an accurate figure for your specific situation is to run a proper illustration which you can usually do on the scheme portal and is exactly what we do at the pop-up sessions.
We are also happy to do this for any employee who gets in touch and compare their rate with the best PCH deal to make sure they can make a fully informed decision.
Do I have to pass a credit check?
No and this surprises a lot of people, particularly those who’ve tried to arrange a personal lease and been turned down or faced scrutiny.
The lease agreement is between your employer and the leasing company and not between you and a finance provider so your personal credit history is not checked at any stage. The financial assessment is carried out on the business, not the individual.
This means salary sacrifice is accessible to employees who might not qualify for a personal lease, including those building their credit history, those who have had financial difficulties in the past, or those who simply don’t want a financial search on their record.
Can I choose any car I want?
You can choose from the range of electric vehicles available through the scheme your employer has set up. In practice, the range available through a well-resourced provider is broad with everything from compact city cars to family SUVs and premium vehicles. If an EV is suitable there is usually a car on the scheme that suits an employee’s requirements.
The practical constraint is budget as the sacrifice amount must not take your pay below the National Minimum Wage, and the monthly cost needs to be something you’re comfortable committing to for the length of the lease.
A good provider will help you understand what’s genuinely affordable at your salary level before you make a decision and this is often part of the discussions we have at our pop-up sessions.
NEV Leasing runs regular employee sessions across Essex, Suffolk and Norfolk — or we’re happy to run the numbers for you individually. Call 01206 585837 or email getintouch@nevleasing.com.
The EV questions that are really about the car:
A significant portion of the questions we hear at employee sessions aren’t about salary sacrifice at all they’re actually about electric vehicles.
For many employees, the scheme is the first time they’ve seriously considered driving an EV, and the concerns are real and understandable.
What if I can’t charge at home?
This is a common EV question and not limited to people considering salary sacrifice – we have similar discussions with company car drivers switching for the first time as well.
Not everyone has off-street parking or a suitable home charging point, and the assumption that you need to in order to make an EV work stops a lot of people before they’ve thought it through properly.
The reality for many employees is that charging at home overnight is the most convenient option, and as previously mentioned some providers include the option and some manufacturers are still offering free of charge wall box chargers on selected models – including Volvo and Audi in June 2026.
For employees without home charging, workplace charging, if available, combined with the growing public charging network across Essex, Suffolk and Norfolk makes everyday EV use more practical than it was even two or three years ago. The public charging network in the UK has grown to over 70,000 charge points as of 2026, and rapid chargers at motorway services mean longer journeys are increasingly straightforward – there are also subscriptions that can be taken out to reduce the price of the charge at selected charge points.
In real terms if you drive predominantly local miles, don’t have home charging, and your employer doesn’t have workplace charging either, an EV requires more planning than a petrol car.
That’s a real consideration and worth working through before committing and something the team at NEV Leasing are happy to assist.
For most employees across the region, it’s manageable, but for some, the timing isn’t right just yet, and that’s a legitimate conclusion to make.
Will the range be enough for how I drive?
With technology improving and more new models and entrants to the market range is improving all the time – as it the speed at which cars can re-charge.
Whilst once a major concern and barrier to EV adoption range anxiety is less common but still a key consideration for those looking at an EV for the first time.
Modern electric vehicles available through salary sacrifice schemes typically offer real-world ranges of 200–300 miles on a full charge, with many exceeding 350 miles. For the vast majority of daily driving patterns including commuting, local errands, and customer or site visits within the region this is more than sufficient, and the car is plugged in overnight rather than requiring a trip to a charging station.
Most of the salary sacrifice agreements we see are for 10000 miles per year or less, which averages around 200 miles per week – for most new EV’s today that is no more than one charge each week – or occasional top-ups when you can.
More often the question isn’t around the maximum but whether the vehicle is suitable to how you actually drive – this is again part of the questions and answers we cover at our pop-up sessions to walk through your typical mileage and journey patterns to help identify vehicles that genuinely work for you rather than just rely on WLTP range figures.
For more information read our articles about a company switching to electric for a driver covering 20000miles per year and whether an electric car is suitable for regular high mileage users.
Can I use it for personal journeys or is it just for work?
It’s your car for the duration of the lease so you can use it for the school run, weekends away, shopping, everything. There is no restriction on personal use but it worth being aware of these journeys when considering your overall mileage as this is agreed at the start of the agreement – and as with any lease or PCP as well excess mileage at the end of the lease will attract a charge.
The BiK tax you pay is fixed regardless of how much personal use you make of the vehicle, so there’s no financial penalty for driving it more.
What happens at the end of the lease?
At the end of the contract term which is typically 24, 36 or 48 months you simply return the vehicle. There’s no obligation to buy it and no residual value risk on your side. The vehicle is inspected against fair wear and tear standards, and provided it’s in reasonable condition for its age and mileage, there’s nothing further to pay.
We work with drivers as the end of the agreement approaches to consider and advise the condition of the vehicle and whether any damage should be repaired before return or if it falls within the BVRLA guidelines – details of the Fair Wear and Tear Guide can be found here.
As your agreement head towards the end you can choose a new vehicle through the scheme, move to a different car entirely, or simply leave the scheme. Many employees find that the end of their first lease is the moment they become the most enthusiastic advocate for the scheme among their colleagues.
The money questions: the ones people are sometimes nervous to ask
These tend to come up quietly, and often one-to-one rather than in a group session. They’re the questions people will understandably have but don’t always want to raise them in front of colleagues. They’re also among the most important.
Will it affect my mortgage?
This is the question we’re asked most often in this category.
Salary sacrifice reduces your gross pay, as in the figure that appears on your payslip and the figure most mortgage lenders use to assess affordability.
If you sacrifice £500 per month, your payslip will show a salary £500 per month lower than before. A lender running an affordability calculation on that figure may offer you a smaller mortgage than they would have before you joined the scheme.
This doesn’t mean salary sacrifice and mortgages don’t mix, it just means the timing can matter. If you’re actively applying for a mortgage or expect to remortgage in the near future, discuss the implications with a mortgage broker before joining the scheme. Many lenders are now familiar with salary sacrifice and will consider the gross-before-sacrifice figure in their assessment, but this varies by lender and isn’t guaranteed.
It is also worth noting that a traditional PCP or PCH agreement will also affect your mortgage affordability calculations as it falls into your costs per month from your take home pay.
If your mortgage situation is stable and not changing in the near term, the impact is likely to be minimal but it is still a question worth asking.
Does it affect my pension?
Potentially, yes and again it’s worth understanding how before making a decision. If your pension contributions are calculated as a percentage of your gross salary, and salary sacrifice reduces that gross salary, your pension contributions may reduce slightly as a result.
Some employers adjust their pension arrangements to calculate contributions on the pre-sacrifice salary, which removes this effect entirely. Others don’t. It’s worth checking your employer’s pension policy specifically before joining the scheme, because the impact varies. For most employees, the financial benefit of salary sacrifice outweighs any marginal pension effect but that’s a calculation worth doing individually rather than assuming.
What happens if I leave my job?
This is the question that causes the most concern for both employees and their employers and can be the one that prevents the scheme going ahead or stops employees joining the scheme.
The concern is understandable as you’re signing a 36-month agreement and you can’t always be certain where you’ll be working in 36 months.
The answer depends on the protection built into the scheme and reputable schemes will include protection that covers early termination events including redundancy, ill health and other significant life changes.
The scope and terms of that protection will also vary as some schemes provide cover from day one, while others have a qualifying period. This is one of the most important things to understand about your specific scheme before signing.
In the best-case scenario and with a well-structured scheme the financial risk to the employee of leaving
mid-contract is minimal or zero, but always ask the question before you commit, and if the answer is unclear, escalate it.
What if I go on maternity or paternity leave, or become ill?
Similar principle. Statutory maternity, paternity, or sick pay is lower than your normal salary and if the sacrifice amount would take your pay below the National Minimum Wage, the scheme must be paused or the vehicle returned.
Many providers will build flexibility for these life events into the scheme from the outset, so employees aren’t penalised for circumstances outside their control.
Not sure how the numbers work for your specific situation?
We’re happy to work through the detail with you individually whether that’s the savings calculation, the mortgage question, or what happens with your pension. Call us on 01206 585837 ... click here to arrange a call back at a time convenient for you ... or download our Employee Guide to Salary Sacrifice
My employer doesn’t have a scheme currently, what can I do?
If you’ve read this, considered the commitment, done the maths in your head and realise it could realty work for you – but your employer doesn’t have a scheme – then read on as this is for you.
It’s more common than you might think, as The BVRLA data showing a 125% year-on-year increase in salary sacrifice registrations is largely a story of employers being asked by their employees and saying yes. Tusker’s Cheryl Clements, speaking in June 2026, put it plainly: ‘It’s very employee-driven now.’ If you want a scheme at your workplace, you’re probably not the only one.
How do I raise it with my employer?
The most effective approach is to make it easy for whoever makes the decision whether that’s your HR manager, your finance director, or the business owner to understand the case quickly and without having to do significant research themselves.
That means coming to the conversation with a few simple points rather than a detailed proposal:
- The scheme costs the business nothing to set up and operate and can potentially generate genuine savings – especially if the business currently offers cash allowance or reimburses employees for business miles covered in their own car.
- Employees access a new electric car at a significant saving compared to any other route which can reduce the companies quotable Scope 2 emissions
- The admin is handled by the provider, not the business
- Businesses across Essex and East Anglia of similar size are already running schemes
You don’t need to be an expert. You just need to open the door to a conversation.
What’s the simplest thing I can do right now?
Forward this article to whoever handles HR or benefits in your business and suggest they have a no-obligation conversation with NEV Leasing. That’s it. You can even download and include our Employers Guide to Salary Sacrifice that will answer some of their questions.
We’ll explain how it works, whether it’s suitable for the business, and what the implementation would involve. If it’s not right for them, we’ll say so. If it is, we’ll help them get it moving.
A number of the businesses we now work with across Essex, Suffolk and Norfolk came to us because an employee forwarded something they’d read and asked their employer to take a look. It’s a low-effort action that can make a real difference to your take-home pay for the next two to four years.
Forward this page to whoever handles benefits or HR and suggest they have a conversation with us. We work with businesses across Essex, Suffolk and Norfolk from as few as one or two eligible employees. There’s no obligation and no pressure, just a straight conversation about whether it makes sense.
They can call us on 01206 585837, emailing us at getintouch@nevleasing.com , or download and send them our Employer’s Guide to Salary Sacrifice.
A final thought
The questions in this article are the ones that come up regularly in our employee and open pop-up sessions that we run across the region.
By the end of the conversation, the persson has the information and clarity they to make a confident decision on an electric car salary sacrifice. Sometimes it’s ‘yes, this works for me, how do I order?’ Sometimes it’s ‘not right now, but I’ll come back when my mortgage is sorted” while others are “we have to have this at the company how we do that” and occasionally it’s ‘this isn’t right for me at all.’
The best outcome is alwaya the one that suits the employee right now and is based on asking the questions and receiving unbiased answers.
If you have any further questions about electric vehicles or salary sacrifice that haven’t been answered in this article you will find our Employees Guide to Salary Sacrifice useful – or if you have any specific questions email us at getintouch@nevleasing.com or simply complete our call back form and we’ll make contact at a time convenient to you.