EV salary sacrifice FAQs
Everything you need to know about EV salary sacrifice from Octopus Electric Vehicles.
What is salary sacrifice?
Salary sacrifice is an employee benefits scheme that allows you to pay for a car out of your gross monthly pay. Because this payment comes out of your pay before any tax, it reduces your salary and in turn lowers your income tax and national insurance payments too.
Money that you'd normally never see (because it goes straight out of your pay to HRMC) goes directly towards paying for your car. This makes it a very cost-effective way to lease an electric vehicle and allows you to save up to 40% on the cost of an electric car.
Check out this guide that explains why companies choose our salary sacrifice scheme.
What's included with EV salary sacrifice?
We offer everything you need to hit the road. Our package includes:
- • Your brand new EV
- • Maintenance
- • Servicing
- • MOT
- • Tyres
- • Breakdown cover
- • Insurance (some employers choose not to include this)
Check out this guide that explains exactly what's included in salary sacrifice and how much it costs.
Will I pay company car tax with salary sacrifice?
Yes. You'll pay company car tax, also known as Benefit-in-Kind, on an EV through salary sacrifice. But the good news is right now it's a super low rate for EVs, at just 2%. And it's frozen until 2025.
Will I pay the same amount each month for an EV on salary sacrifice?
Your net payments may vary based on a few things, for example, if you change tax brackets, or if the government changes the Benefit-in-Kind rates. The good news is, BiK is fixed at 2% until 2025.
Is salary sacrifice open to everyone?
Your employer needs to join the scheme before you can get an EV with salary sacrifice. Once your business has joined the scheme, your employer decides who can get an EV through it.
As a minimum, you need to have completed your probation period, be on a permanent contract and paid via PAYE, and hold a valid UK driving licence. You must also be able to afford the vehicle without going below minimum wage and not be planning on retiring during the length of the contract.
There are additional insurance eligibility criteria which you can see here.
How long does a salary sacrifice agreement last?
It's up to you! You choose the length of your agreement, between 2 and 4 years.
Can I choose my yearly mileage allowance with salary sacrifice?
Yes. You're in control of your yearly mileage allowance. The minimum is 5,000 and maximum is 30,000 miles.
What happens when the car needs a service or maintenance?
With salary sacrifice you get a full maintenance scheme which includes servicing, batteries and tyres under normal wear and tear conditions.
If you need help just need to phone our Driver Line on 0203 3222 601 to book in. When the car's delivered we'll also give you a pack with all the information you need on servicing and maintenance.
What happens if I resign or am made redundant while I have an EV on salary sacrifice?
If you resign or are made redundant during your salary sacrifice agreement, the EV can be returned and your employer’s early termination leaver protection will be used, usually resulting in no fee.
What happens if I go on parental leave while I have an EV on salary sacrifice?
If you go on parental leave while you have an EV on salary sacrifice you can keep the car and continue to pay for it for as long as you can afford to. If your salary drops below minimum wage and/or statutory pay, you'll be covered for up to 12 months from the start of your leave.
If you don't need the car anymore you can return it and your employer’s early termination leaver protection will be used, usually resulting in no fee.
What happens if I go on long term sickness leave leave while I have an EV on salary sacrifice?
If you go on long term sickness leave you can keep the car and continue to pay for it for as long as you can afford to. If your salary drops to a level below minimum wage and/or statutory pay, you'll be covered for up to 3 months from the start of your leave (defined as being off on sick leave for 4 weeks or more).
If you don't need the car anymore, you can return it and your employer’s early termination leaver protection will be used, usually resulting in no fee.
What happens if I lose my licence on medical grounds during my salary sacrifice agreement?
The car can be returned, and your employer’s early termination protection will be used, usually resulting in no fee.
What happens at the end of the salary sacrifice agreement?
You return the car, and we'll check for any damage or excess mileage charges. Damages above our end of contract damage waiver, and excess mileage charges, will be invoiced to the employer and are usually then deducted from the employee’s net salary.
Do you need to see my driving licence?
Yes. We'll check it when you order your car and every year once you have the car.
Are there any fees or other payments involved with salary sacrifice?
There are no set up fees for salary sacrifice and no upfront payments. There may be charges in circumstances of excess mileage, certain early termination circumstances, end of contract damages or fines.
Do I need to be an Octopus Energy customer to get an Octopus EV?
In short, no.
But if you get our home charging offer, you'll need to switch to the Octopus Go tariff to get the 5,000 free miles of home charging. You'll get a free charger with standard installation no matter who your energy provider is.
If you're going to do most of your charging on the road and opt for the 5,000 free miles of charging on the Electric Juice public charging network, you'll get this no matter who your energy provider is.
Find out more about our charging offers here.
Octopus Electric Vehicles in Northern Ireland
Can I still get a car from Octopus Electric Vehicles if I live in Northern Ireland?
Yes you can, but there are a few things you should know.
How do EV car deliveries work if I am based in Northern Ireland?
The electric vehicles are currently delivered to mainland UK only, but it depends on the manufacturer.
Is the charging offer for home EV chargers still valid in Northern Ireland?
Yes, you can get the home charger package if you live in Northern Ireland.
Are there a network of garages for electric vehicles in Northern Ireland?
Yes, you can get your EV serviced by garages in Northern Ireland.
Can I return an electric vehicle in Northern Ireland?
Sorry, we can only take returns in mainland UK.