How To Choose The Best Salary Sacrifice Scheme

03 December 2021

How To Choose The Best Salary Sacrifice Scheme

The central focus of any salary sacrifice scheme is of course the employee. They are giving up a portion of their salary and they are receiving the non-cash benefit. The benefits to the employee are plentiful, particularly with a salary sacrifice car scheme, but there have to be benefits to the employer also.

Choosing a suitable salary sacrifice car scheme needs to involve a strategic analysis of all areas of the business. And while there are staple ingredients that a salary sacrifice car scheme HAS to include, there are major differences between the products available on the market. So here we look at the areas of the business which can benefit from choosing the right salary sacrifice car scheme and how you can identify these benefits in a particular product.


Leasing an electric vehicle as part of a salary sacrifice car scheme can bring the employee many cost benefits, but it can also bring value for money for the business too. Every scheme involving zero-emission vehicles enables the employee to take their salary hit on their gross salary rather than their nett, so there is a real cash benefit in terms of less income tax and national insurance payments. The business also benefits here because its national insurance payments are also reduced. But a good salary sacrifice car scheme will deliver cost reductions in fleet management also. Leasing vehicles and better fleet monitoring allows you to manage efficiencies better in terms of how employees drive, how vehicles perform, route planning, job planning and service and maintenance. These can all add up to useful bottom line cost savings.

Climate impact

By leasing electric cars you are reducing the climate impact of your business. But you need to manage the scheme so that employees want to drive an electric vehicle. Zero or reduced emissions are what most people strive for, but it still has to be cost-effective, so partnering with a scheme that can offer the best lease deals will work in your favour. A good scheme will also be able to offer both new and used electric cars for lease, in order for employees to have the best available choice to suit their budget. This will all improve take-up and ensure that your CO2 impact is vastly reduced, possibly also helping you reach environmental targets and objectives.


Small to medium businesses have enough administration challenges as it is, so any kind of salary sacrifice scheme the organisation signs up to needs to be practical and relatively easy to manage. A good scheme will have a simple sign-up and registration process, plenty of ready-made online resources to explain the scheme to employees and an online portal to enable efficient management and to offer administrative benefits. It is also an advantage if the scheme is flexible in terms of how long vehicle lease deals are, to accommodate as many employees as possible. People want options to suit their budget and circumstances, so a lease deal extending from six months up to 48 months is attractive to a business.


In the modern day, businesses need all the help they can get to remain compliant with external regulations, internal controls and targets and legal duties. In terms of tax implications a scheme needs to be HMRC-approved to ensure it controls tax responsibilities properly. After that, you are maintaining employee details so there are GDPR responsibilities also. But a good scheme should provide human resource benefits with its employee and vehicle records and help with fleet compliance in terms of MOTs, service and maintenance, insurance and driver licences.

Employee motivation

A good salary sacrifice car scheme needs to include all the above features so that the business can promote it as an appealing perk to employees. This helps with staff motivation, morale and loyalty, and it can work to both attract the best employees and retain them. This will help the business with productivity and staff turnover, and also with issues such as absenteeism and even workplace accidents. Ultimately also, because the scheme has to be made available to all employees, ie. those who maybe don’t qualify for a customer car, it is a good tool for the business to promote inclusivity and fairness, by openly treating all employees equally.

All the features mentioned here are included in the salary sacrifice scheme offered by Pink Salary Exchange. This is the next generation of salary sacrifice car scheme and is a tried and tested product designed by people with over 20 years’ experience in the industry. Get in touch with Pink Salary Exchange today and choose the best salary sacrifice scheme for your business.

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