Finance Director’s guide to EV Salary Sacrifice

The FD says no! How often do you hear that? The person responsible for the cashflow of the business, the protector of the company’s profits, is not often given over to ideas that cost the business money without ROI certainty.

But here’s one that should delight any Financial Director: electric car salary sacrifice.

You can stop the staff moaning at you, provide a benefit they’ll love – and you’ll save the company money. There’s a lot of wins there.

The savings are very real on car salary sacrifice, thanks to the reduction in employee’s gross pay following deduction of the car rental.

In the example below on the classy Genesis GV60, over a three year term salary sacrifice could save a company £3,843 in saved NIC payments. On just one car.

Let’s have a look:

Car: Genesis GV60 on Salary sacrifice

Cost of providing company car: -£908.60
Class 1A NIC payable on company car: -£18.65
Gross salary sacrificed by employee: £908.60
Class 1 NIC saved on salary sacrifice: £125.39
Monthly employer saving:  £106.74

There are further hidden savings. Car salary sacrifice schemes are considered critical in retaining talent, because recruiting new staff can cost between 20 to 30% of an employee’s salary, before training, pension costs and so on.

So not only do you save on each car under salary sacrifice, but you save the hidden costs of recruiting new staff.

Yet more wins for the FD.