Salary sacrifice provider Tusker has found that 63% of employers that offer salary sacrifice schemes are motivated by giving employees an accessible way to drive an electric vehicle (EV).
More companies are starting to offer the schemes, in lieu of pay rises, as a low-cost employee benefit.
Cheryl Clements, head of business development at Tusker, said: “Because of the significantly lower Benefit-in-Kind (BIK) rates for EVs that are available, there is no cheaper way of an employee getting into a car like this.
“It also helps employees cope with the cost-of-living crisis, because most people still want to drive, and they can save on tax and fuel costs by having an electric car on the scheme, and can budget easier with a fixed cost motoring package.
“We’re hearing anecdotally that having an electric car helps them to feel more secure with their employer as well.”
Offering a salary sacrifice scheme can result in savings for employers, with lower National Insurance (NI) contributions.
38% of employers said this was a factor in the decision, and 37% said salary sacrifice schemes were a cost-free benefit for employers.
47% of employers kept the savings, reinvesting them into other schemes, while 23% put the savings into salary sacrifice schemes, further driving down costs for employees.
However, 32% of employers were worried that some employees would not be able to afford to partake in such a scheme.
Nick Ryding, head of account management at Tusker, said: “The October budget, where it was confirmed that by tax year 29/30 Benefit-in-Kind rates for fully electric cars will still be in single figures, has given people a lot more confidence.
“Being able to offer five-year agreements means employees will be fully aware of what the outlay on a salary sacrifice car will be for the next five years.
“The insurance cost is fixed, and they’ve got peace of mind that if a lifestyle event were to happen, that they can hand the car back without any financial penalties.”
Companies are increasingly forgoing company car and car allowance schemes in favour of salary sacrifice, with 55% of employers who provide a salary sacrifice scheme not offering a company car or car allowance alternative.
46% of employers who offer car allowance schemes say they do not know how the money is spent, while 30% said only a few, at best, use it for a car.
