Worth it? Why offer Salary Sacrifice to your people
As employee expectations continue to change with the growing anxiety surrounding the cost of living crisis, HR teams are under increasing pressure to offer benefits that deliver personal and genuine value. Enter Salary sacrifice schemes, one of the most effective ways to support financial wellbeing, sustainability goals, and employee engagement. YouGov reported that 74% of UK employees would like a car scheme offered at their workplace. Not only does salary sacrifice help employee retention, but it’s cost‑efficient for employers.
Salary sacrifice allows employees to exchange part of their gross salary for a non‑cash benefit. Popular options include electric car salary sacrifice schemes, cycle to work schemes, and technology benefits. One of the key advantages of salary sacrifice for employees is tax efficiency. Because payments are taken from gross salary, employees may reduce their Income Tax and National Insurance contributions, depending on the benefit provided. Employees then have access to the latest technology, vehicles and bikes that they may otherwise not be able to afford within their budgets.
Why salary sacrifice is a win for employees
Unlike traditional benefits in kind, many salary sacrifice benefits are designed to maximise value while remaining compliant with HMRC rules. For example, electric vehicles currently attract much lower benefit in kind tax rates than petrol or diesel alternatives, making an electric car salary sacrifice scheme a financial win for many employees, and make sure they are prepared for the future, and the ban on diesel and petrol cars in 2030.
Empowering choice and flexibility
A major advantage of salary sacrifice is employee choice. Alongside holistic benefits such as discounts and wellbeing support, employees can select benefits that align with their lifestyle, priorities, and stage of life. This flexibility helps position benefits as relevant, modern and genuinely useful, a key factor in attraction, retention and engagement strategies for management and HR teams to support their colleagues successfully.
For HR teams, salary sacrifice is a powerful way to demonstrate commitment to their people. With benefits that align with both employee expectations and the company’s EVP.
Improved wellbeing
Whether it’s commuting to work with a new sustainable vehicle, getting fit with a new bike, or simply benefiting from lower monthly costs, salary sacrifice schemes help reduce financial pressure and improve mental wellbeing. Employees will feel motivated and positive about their company, which ultimately contributes to stronger retention, morale and performance.
For more information on salary sacrifice schemes, contact our sales team for a free demo
