Gross Salary Deduction
Payments are taken directly from your salary before income tax and National Insurance are calculated, significantly reducing your taxable income.
An EV salary sacrifice scheme is a government-approved employee benefit where you exchange a portion of your pre-tax salary for a brand-new electric car. Because the payment comes out before tax, you can save up to 50% on leasing, insurance, and maintenance costs.
Payments are taken directly from your salary before income tax and National Insurance are calculated, significantly reducing your taxable income.
By lowering your gross pay, you pay less to HMRC every month. Higher-rate taxpayers can see total savings of up to 50% on their vehicle costs.
One single monthly payment covers your brand-new EV, comprehensive insurance, routine maintenance, breakdown cover, and even replacement tyres.
See the difference between a traditional Personal Contract Hire (PCH) and our Salary Sacrifice scheme for the Tesla Model 3.
| Comparison Item | Personal Lease (PCH) | Salary Sacrifice |
|---|---|---|
| Monthly Gross Cost | £489.00 | £489.00 |
| Income Tax and NI saving at 42% | £0.00 | −£205.38 |
| BiK | £0.00 | +£53.33 |
| Maintenance & Insurance | Customer Pays Extra | Included |
| Total Monthly Net Cost | £560.00 (Est) | £336.95 |
Personal Lease (PCH)
£489.00
Salary Sacrifice
£489.00
Personal Lease (PCH)
£0.00
Salary Sacrifice
−£205.38
Personal Lease (PCH)
£0.00
Salary Sacrifice
+£53.33
Personal Lease (PCH)
Customer Pays Extra
Salary Sacrifice
Included
Personal Lease (PCH)
£560.00 (Est)
Salary Sacrifice
£336.95
Figures based on a 42% tax payer over 36 months / 10,000 miles per annum.
Already have a provider? We specialise in secondary supply.
Even if your company has an existing scheme, CheapEV can act as a secondary supplier to provide better vehicle availability, faster delivery times, and competitive benchmarking to ensure you always get the best deal. We work alongside your current provider with zero disruption to your payroll.
You could pay around
£230 /mo
52% effective saving · save £250/mo
Illustrative estimate only. Calculations are based on current assumptions and may vary depending on your salary, tax rate, lease cost, employer scheme, applicable tax, BiK and NI. Not a quote or financial advice.
We help companies of all sizes set up cost-neutral EV salary sacrifice schemes in as little as 48 hours.
Fully electric cars benefit from a low company car tax percentage, helping make salary sacrifice attractive. Your annual BiK tax is generally the car’s P11D value multiplied by its BiK percentage and your applicable Income Tax rate. P11D value broadly means original list price including VAT and taxable accessories. For example, £40,000 × 4% × 40% gives £640 a year—about £53.33 a month for a full year.
Knowing the rates ahead helps you plan confidently. For zero emission cars, the BiK percentage is 4% in 2026/27, 5% in 2027/28, 7% in 2028/29 and 9% in 2029/30. Tax years start on 6 April. These rates determine the taxable benefit, not your Income Tax rate. Ask for a quote showing the expected cost across your lease.
A clear quote makes budgeting easier. Your rental may be fixed, but the net cost to you can change with scheduled BiK increases, earnings or your tax position. Ask for year by year estimates and details of any charges that can change under the agreement so you can choose with confidence.
A quick conversation with your benefits team will help you understand the full picture. Ask whether pension contributions and salary related benefits use your original or reduced salary, and how statutory pay may be affected. With these details clear, you can decide whether the scheme works well for your circumstances.
Yes, an existing scheme may still leave room to explore more vehicle choice. CheapEV can help source a car alongside your current provider, subject to employer and provider agreement. Get in touch to explore compatibility, responsibilities and the final payroll cost.
