Is salary sacrifice worth it?

There are two reasons why you may look for an answer to the question is salary sacrifice worth it?

  1. You’re an employer considering offering it as a perk to your employees.
  2. You’re an employee and you’re considering taking advantage of a salary sacrifice scheme your employer offers.

    Whichever of the above you fall into, the answer to the question is a resounding yes, followed by a slightly more muted but… Because yes, salary sacrifice is worth it, but it also depends entirely on what you’re looking for and your circumstances.

    In this post, we’re going to expand on the yes but, and explain how a salary sacrifice scheme is worth it, the benefits it has for employers and employees, and why salary sacrifice is a fantastic way to get behind the wheel of your very own electric car.

    Someone removing their bag from the boot of their Polestar 2 while parked outside a house.

    What is a salary sacrifice scheme?

    A salary sacrifice scheme allows employees to give up a certain amount of their monthly salary in exchange for something they need.

    Examples of popular schemes include:

    • Bicycles
    • Pensions
    • Childcare vouchers.

    Another great example of this is an electric car salary sacrifice scheme.

    For example, subscribing to a Fiat 500e through elmo would usually cost from £477 per month. But, by sacrificing some of their salary and the subsequent benefit-in-kind savings, employees can save between 30% and 60%. So, instead of £477 per month, an employee earning £45k could pay around £334 instead.

    And the best part is, it doesn’t cost the employer anything. So, it’s a low-admin, cost-free way for a business to offer its employees a highly desirable perk while also reducing its environmental impact.

    An MG4 EV driving along a country road

    …to discover exactly how much you could save every month.

    An MG4 EV driving along a country road

    How can employees benefit from salary sacrifice?

    The biggest benefit of a salary sacrifice scheme is, of course, that employees get access to an affordable and flexible way to pay for an expensive item or service. For example, with an EV subscription, salary sacrifice can significantly lower monthly costs, making driving an electric car far more accessible for a huge number of employees.

    Specifically with elmo, an electric car salary sacrifice scheme has fantastic benefits for employees:
    Save between 30% and 60% on EV subscription costs (depending on your salary).
    Access to elmoCharge, which allows you to also save between 30% and 60% when using public charging systems to save you even more money.
    You get an all-inclusive package that includes everything you need to drive the car: insurance, MOT, vehicle excise duty, service, breakdown cover and more. Yet another way you’ll save money.
    The choice of an EV from a wide range of electric cars.
    The flexibility to make changes to your subscription whenever you like.

    Read our employee guide to salary sacrifice for more detailed information.

    How can employers benefit from salary sacrifice?

    As well as a salary sacrifice scheme having a range of benefits for employees, there are also advantages from the point of view of an employer:

    • Offer a highly desirable perk to attract and retain top talent.
    • Build a reputation as an employer that values its employees.

    By offering an elmo EV subscription through salary sacrifice, there are further benefits:

    • Pay nothing, thanks to a salary sacrifice scheme having zero net cost.
    • Lessen the environmental impact of your organisation.
    • No risks and costs associated with early termination.

    Read our employer guide to salary sacrificefor more detailed information and our guide to the pros and cons of salary sacrifice.

    A Polestar 2 in midnight blue parked outside a blue house on a street in London

    What are the drawbacks of salary sacrifice schemes?

    While there are many advantages to salary sacrifice schemes, there are certain things to be aware of before you sign up for one, specifically from the point of view of an employee.

    Your main consideration should be the impact signing up for a scheme will have on your monthly take-home pay. If we use the example from above, if you’re earning £45k a year your take-home pay will be around £2,885 per month (not including pension, student loan repayments or any other deductions). So, if you’re sacrificing £334 per month for your EV, your take-home pay will become approximately £2,551. You may have saved money, but it’s still a smaller amount hitting your bank account every month, so make sure it’s something you can comfortably afford.

    Depending on the scheme you sign up for, you may be tied in for a certain length of time. Leases will regularly tie you in for a year or more, which can be expensive to break if you need to stop for any reason. However, an EV subscription is far more flexible and won’t cost you the earth if you need to make changes after the initial 60 days.

    Is a salary sacrifice scheme worth it for you as an employee?

    A salary sacrifice scheme can be a fantastic way to save money on an expensive item, especially if it’s something you already need, such as a car or childcare vouchers. It’ll save you money and provide you with the thing you need – what’s not to love?

    As already mentioned, the main thing to be aware of is how it affects your take-home pay. Will signing up to a salary sacrifice scheme mean you don’t have much wiggle room when it comes to your finances and monthly bills? Carefully assess your options and make sure you don’t accidentally put yourself in an awkward situation and have to cancel your scheme just a few months in.

    Is a salary sacrifice scheme worth it for you as an employer?

    Offering a salary sacrifice to your employees is a win-win scenario. It enables you to provide employees with a fantastic perk and it ensures your business is doing its part to lower its impact on the environment. Plus, there’s the added benefit of it costing your business nothing, making it more like win-win-win.

    Read more in our guide to salary sacrifice for employers.

    A Polestar 2 being started up by the driver wearing sunglasses.

    Looking to get started?

    Now that you know a salary sacrifice car is worth it, especially for an electric car, there’s no time like the present – contact us today to start the ball rolling at your organisation and browse our range of EVs to see which car your employees could be driving very soon.

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