Salary sacrifice car schemes are primarily promoted as an employee benefit, and rightly so. They are an increasingly common tool used to promote inclusivity within an organisation and are changing the expectations of employees in terms of what they can obtain from an employer in a renumeration package, even though they are entirely voluntary.

Salary sacrifice car schemes also have a range of benefits for the employer, and we will outline three of the most important. A salary sacrifice car scheme works by the employee giving up a portion of their salary in exchange for a non-cash benefit. In some organisations, while this could be additional payments into a pension scheme or healthcare benefits, one of the most popular types of salary sacrifice schemes is for the lease of a brand-new vehicle.

The salary sacrifice car scheme offered by Pink Salary Exchange provides the employee with exclusive use of an electric vehicle for a lease period that can be flexible between six months to four years. This enables them to benefit from reducing their carbon footprint and drive a brand-new vehicle with the very latest technology, while also having a fixed monthly motoring cost which they can adapt to suit their personal budgeting requirements. In addition to these employee benefits, there are also transformational benefits for the business available.

1. Reduced national insurance contributions

From the point of view of the business, there is a clear financial benefit to offering salary sacrifice car schemes for zero-emission vehicles. Current legislation states that employees can take the salary reduction off their gross salary if they lease a zero-emission vehicle. This means they are effectively paying less income tax and national insurance, and the overall payroll amount is reduced for each employee on the scheme, resulting in the employer paying reduced national insurance contributions also. The employer can use these savings elsewhere in the business, or use them to make the scheme cost neutral to the business.

2. Improving the company culture

Creating and maintaining a more positive company culture can be achieved in many different ways through a salary sacrifice scheme:

–  Recruitment – A business can attract a better quality of employee by offering a salary sacrifice car scheme as part of the package. This type of employee benefit is a major attraction in a competitive job market.

– Employee engagement and motivation – Salary sacrifice car schemes are voluntary and must also be offered to all employees across the board in an organisation. This is very different to the historical approach to company cars, which could be seen as the domain of ‘elite’ members of the workforce, creating a degree of separation between levels of the organisation. As salary sacrifice car schemes are open to everyone, this promotes a culture of fairness and inclusivity, and as a result employees feel more valued and are more engaged and motivated in their work. In addition to benefitting staff turnover and promoting loyalty, this can also benefit the business in terms of productivity and profitability, reducing absenteeism and accident rates.

– Employee loyalty – Retaining good employees is much easier when offering positive employee benefits. These can make the employee feel more secure and promotes a sense of loyalty which helps to maintain a stable workforce and saves the business considerable costs in recruitment and training. It is also bad for morale if other employees see a high turnover of staff.

– Health and wellbeing – Offering employee benefits such as these demonstrate that an employer is prioritising the employee and values their health and wellbeing. Driving a brand-new electric vehicle on a flexible and affordable lease deal is a considerable lifestyle enhancement, and goes a long way to improving the work-life balance of the employee, which can help to maintain high levels of performance and reduce stress-related illnesses. On a wider scale, these types of schemes also promote the social responsibility of the business and enhance its public profile as a good employer.

3. Compliance

Whatever industry sector your business is operating in, it is likely to be controlled by a series of regulations and many of these are common between industry sectors. A salary sacrifice car scheme such as that offered by Pink Salary Exchange is managed and administered through an online portal. This gives the fleet manager good visibility of grey fleet and also how issues with compliance are managed. It is possible to manage tax requirements, insurance, service and maintenance, MOTs and licencing through a centralised system. This helps the employer with their duty of care to manage the health and safety of employees and their vehicles, and to reduce risk.

Promoting zero-emission driving also helps the business with its corporate responsibility to meet environmental targets and objectives, and reduce its carbon footprint. The robust management of this online system provides the employer with strong systems and documentation to maintain their payroll responsibilities, and help ensure their compliance with employment law and HMRC regulations.

If you want to learn more about the employer benefits of the salary sacrifice car scheme offered by Pink Salary Exchange, contact our team today.