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Salary Sacrifice

What is salary sacrifice?

Salary sacrifice is an employee scheme that enables people to exchange part of their gross (before tax) salary for a non-cash benefit, such as a cycle to work scheme, child care vouchers or now, a brand-new electric car. To access these schemes. businesses need to partner with a specialist provider, such as Marshall Contract Hire

The savings for both employee and employer can be significant. Thanks to government tax incentives, leasing a brand-new electric vehicle in this way can save the driver up to 60% compared to a personal lease.

It is much easier to set up and run than you might think. We will help your business get set up with a Sal Sac scheme and manage everything from helping your employees order a new electric car through to monthly payroll adjustments.

Benefits of Salary Sacrifice

What are the benefits for an employer?
  • Reduced business National Insurance Contributions (NIC)
  • An attractive employee benefit without increased costs to your business
  • Lower your fuel expenses as fewer conventional cars are used for business trips
  • Encourage cash allowance “drivers” back into company cars
  • Fully maintained and dependable cars reduce the risks associated to grey fleets
  • Helps support your Environmental, Social and Governance aspirations
  • A valuable tax-efficient benefit that is available to all employees
  • Increases employee engagement, motivation and supports retention
  • Enhances your credentials as a recruiter for new talent
What are the benefits for employees?
  • Access to a brand-new electric car at a fraction of their normal cost
  • Significant income tax and National Insurance savings
  • No up-front costs, credit checks or end of term obligations
  • Transparent and fixed pricing for the duration of the term
  • Significantly lower your "fuelling" costs by switching to electric
  • Flexible mileage options and contract duration to suit your lifestyle
  • Maintenance, insurance and breakdown cover included
  • Reduce your carbon footprint

Salary Sacrifice FAQ’s

Is a salary sacrifice worth it?

For most employees, YES!. A Marshall Contract Hire salary sacrifice is a great way to help you and your employees save while developing a more sustainable business model.

How could salary sacrifice affect your employees?

Your employees’ state pension is based on their National Insurance contributions record, and a salary sacrifice lowering the amount contributed may impact their state pension. A reduction in salary could also impact the amount a mortgage provider might lend for a new house. These are things to consider for an employee entering a Sal Sac programme

Can an employee salary sacrifice with bad credit?

Yes, as the payment comes out of your employees’ salary, there are no personal credit checks. That means they can still take advantage of the scheme if they had adverse credit.

How much salary can your employees sacrifice?

It often depends on your company’s terms, but usually, an employee will still have to take home at least minimum wage – even after a salary sacrifice.

How many cars could an employee have under Sal Sac?

Marshall Contract Hire Sal Sac scheme will allow an employee two vehicles providing the salary sacrifice doesn’t mean their take home pay drops below minimum wage rules.

How much will salary sacrifice save?

Each employee is different. Therefore, their savings will vary – but it can be up to 60% against the cost of a personal lease. Personal Tax rates and the vehicle chosen will impact the level of savings available.

If you would like more information on how Marshall Contract Hire EV Sal Sac scheme could benefit your business and employees, please contact us here