How do the latest Employer National Insurance changes affect EV salary sacrifice?

In 2025, Employer National Insurance had a bit of a shake-up. And it's good news for your EV salary sacrifice scheme.

In the 2026/27 tax year, here’s what you need to know about Employer National Insurance:

• Employer NI is 15%, up from from 13.8% before the change came in April 2025.
• Employers start paying NI on salaries above £5,000 a year (previously it kicked in at £9,100).

On the face of it, that means more Employer National Insurance to pay. But luckily, EV salary sacrifice help you claw some of that back.

Whenever someone swaps part of their salary for a car, you don’t pay Class 1 NI on that chunk. And at the new 15% rate, those savings are bigger than before.

Here’s a quick example:

• If an employee sacrifices £500 a month, you (the employer) save £75 in NI.
• If it’s £1,000 a month, that’s £150 saved.

Multiply that across your team, and suddenly NI doesn’t seem so daunting.

And that’s not to mention the personal tax savings your employee will make on top of this.

Although EV salary sacrifice reduces Class 1 NI, you do still need to pay Class 1A NI. This is the tax you pay on benefits you provide to employees, including the electric cars in your EV scheme.

For the 2026/27 tax year, Class 1A NI is 15%. It’s calculated like this:

• Class 1A NI = Car value x Benefit-in-Kind % x 15% (the Class 1A rate)

For example, a £30,000 car with a 4% BiK rate works out at £180.

Class 1A NI is only paid once a year, in July, so it’s easy to plan for. You need to submit your forms by 6th July, and pay by 22nd July (unless you’re old school and pay by cheque, in which case it’s 19th July). 

You can choose to pass some of your Employer National Insurance savings on to your employees through NI passback. It reduces the cost of their car, and you can still keep enough to cover what you (as the employer) need to pay in Class 1A National Insurance.

We recommend passing back 10% of the savings to your employees. Here’s how it works:

• You can adjust the passback for new orders.
• Your existing cars (and those that haven’t yet been delivered) stay at the rate we agreed when they were ordered.
• Any changes only happen after you confirm with your Account Manager.

It’s a simple way to balance savings for your business with benefits for your employees.

The April 2025 National Insurance changes may have felt like a curveball, but your EV salary sacrifice scheme will continue to deliver value. By reducing Class 1 NI on sacrificed salary and managing Class 1A NI well, you’ll save your business money while also cutting your carbon emissions.

At the moment, using a 10% NI passback strikes a good balance, giving employees a benefit without compromising your savings, but it’s ultimately your call on what to do with those savings. Across different car models and values, the scheme consistently reduces overall NI costs, making it a smart, manageable way to support both your team and your bottom line.

That means even with the updated Employer National Insurance rates, your EV salary sacrifice scheme is a triple win: good for your employees, good for your business, and good for the planet.

As with all things tax related, policy can change. We will regularly review our position on this to make sure that it is accurate and based on the most up-to-date information given to us.