Salary sacrifice car schemes are a major part of the HR strategy for 2025 to improve employee experience.
- According to 31% of HR professionals and benefits professionals, improving employee engagement and experience is their number one priority for 2025.
- Salary sacrifice car schemes are rated as important or high by 43% of employers in their benefit strategy.
- 38% cite the savings in National Insurance (NI), as a main reason for implementing a program
- Employers offer salary-sacrifice car schemes to employees in order to make electric cars more affordable.
Tusker, a salary sacrifice car scheme provider that offers electric cars, has released a new “Driving loyalty through electric cars” report.
The study examines what benefits employers think employees most value. The study reveals that company-contributed retirement, paid sick leaves, flexible and hybrid work, mental health and wellness support, and private medical insurance all rank highly.
The study shows that 43% employers rate salary sacrifice schemes for cars as high or very important. This puts them in the spotlight, as they are a tax-efficient and compelling way to support employee wellbeing, sustainability goals, and retention strategies.
The HR and benefits professionals also chose this sentiment as their most important area of focus, while 20% said that supporting recruitment efforts and becoming an employer-of-choice is also a key focus.
Cheryl Clements is the Head of Business Development for Tusker. She said, “With only 14 percent of employers anticipating pay increases above 4 percent in 2025, there’s a lot of pressure to provide benefits with a real impact.” Salary sacrifice schemes for cars, especially those that provide electric vehicles (EVs), have become increasingly popular as a way to offer value to employers and employees. They allow employees to manage their budgets better while providing a benefit that improves their life.”
The report also found that 63% employers offer salary-sacrifice car schemes to make electric EVs affordable for their staff. EV salary-sacrifice schemes are becoming increasingly popular and cost-effective as living costs rise and the desire for sustainable transportation grows. They allow employees to drive fully insured, maintained, and new electric cars at a fixed amount per month, often with significant savings due to tax efficiencies.
According to 38% of employers, the savings in National Insurance contributions (NI) are a key reason to implement a scheme. 37% see it as a benefit that is cost neutral, requiring no extra budget to provide meaningful value to employees. The savings are a win-win situation: Employees get a desired benefit while employers gain financial benefits without adding to their budget.
Reinvesting the savings in NI is also a popular choice for organisations. Nearly half of employers (47%) reinvest these savings in the business or employee benefits to broaden their overall rewards. While 23% of employers choose to share their savings with employees directly, they can further subsidise the cost of vehicles and make the benefit more accessible for those on lower wages.
Landsec, for example, has seen a significant increase in employee engagement since the introduction of EV programs. In response to employee demands, Landsec launched the scheme in 2024. The company reported that staff satisfaction with their benefits package increased by 26 points. Landsec’s experience shows how a good benefit package can improve employee satisfaction as well as sustainability.
Clements concludes that “as employers seek smarter ways to engage their employees and retain them, benefits must be both meaningful as well as sustainable.” Salary sacrifice schemes for cars tick both boxes. They offer employees greater financial security and support greener choices. This benefit reflects the new priorities of today’s workers. “We are proud to provide flexibility in terms of fixed-cost motoring and lifestyle protections. We also offer the option to return cars during events like resignation or redundancy. This removes barriers for employers and employees alike.”
The original version of this article, Salary sacrifice car schemes are a major part of the HR priorities for 2025 that will improve employee experience, first appeared at HR News.
