Expert Blog

Five things every employer should know about Salary Sacrifice


We recently extolled the benefits to employees of getting a car through Salary Sacrifice. But offering such schemes isn’t pure altruism on the part of employers. They get a number of big benefits too – even beyond lower National Insurance Contributions. In this post, we have drawn up a list of five things employers should bear in mind as they consider whether to offer Salary Sacrifice:

1. Attract, motivate and retain the best employees

In our previous post, we detailed the many ways employees can benefit from Salary Sacrifice schemes – from the opportunity to drive a nicer, newer car to the peace of mind of having maintenance and servicing included. Offering these benefits to your workforce is a great way to motivate them and reward their hard work, as well as to attract the brightest new talent to your team. It’s also a good way to keep your employees on-board, as they may be more reluctant to leave if it means handing back the keys.

2. Improve your environmental impact

Businesses in all sectors of the economy and all parts of the country are striving to go green – and a Salary Sacrifice scheme can help. Cars are getting cleaner and cleaner every year, so using Salary Sacrifice to get your workforce driving newer cars can drastically reduce your fleet’s carbon dioxide (CO2) emissions. According to a report by the BVRLA and the Energy Saving Trust, the average car on the road in the UK is 7.9 years old and emits 154 grams of CO2 per kilometre. By contrast, the average Salary Sacrifice car is just 1.3 years old and emits only 103g CO2/km.

3. A more reliable fleet

Newer cars also mean fewer problems. According to that same report, 99% of Salary Sacrifice schemes are less than three years old, and therefore much less likely to suffer reliability problems or need repairs. Just 18% of three-year-old cars fail their MOT, compared to 48% of eight-year-old ones. Salary Sacrifice also includes maintenance and servicing as part of the monthly payment, so any problems that do arise can be corrected quickly and painlessly. This gives employers the confidence that their employees can get where they need to go, when they need to get there.

4. Fits alongside other employee benefits

Of course, Salary Sacrifice isn’t just for cars. Employers are increasingly offering their employees a range of benefits through similar schemes, including childcare vouchers, pension contributions and medical insurance. A survey by XpertHR in 2014 found that 60% of employers were offering some form of Salary Sacrifice. Since not all employees have the same needs, offering as wide and as flexible a benefits package as possible makes sense. Some might want to forego a portion of their income for medical insurance, others might want to take childcare vouchers… and some might want a new car.

5. Help is at hand

Every employer’s situation is different, and there’s a lot more to weigh up when deciding whether a Salary Sacrifice scheme is right for your business. If it is, fine-tuning the details to suit your needs is crucial. Fortunately, we at Hitachi Capital Vehicle Solutions are here to offer all the information and support you need to make the best choice at every step of the way.

To find out more, please contact us or call 0343 351 9073 to speak to one of our experienced fleet consultants.

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