Salary sacrifice car schemes will play a key part in improving employee engagement and experience in 2025, according to a new report.
In ‘Driving Loyalty Through Electric Cars’ a third of HR professionals say improving employee engagement and experience is their top priority this year.
Tusker produced the report and explored the benefits that employers believe employees value most. It found that 43% of employers now rate salary sacrifice car schemes as either ‘high’ or ‘very important’, placing them firmly in the spotlight as a compelling, tax-efficient way to support staff wellbeing, sustainability goals and retention strategies.
Cheryl Clements, head of business development at Tusker, said: “With only 14% of employers expecting to offer pay rises above 4% in 2025, the pressure is on to provide benefits that make a real impact.
“Salary sacrifice car schemes, particularly those that offer electric vehicles (EVs), are increasingly being seen as a cost-effective way to deliver value to both employers and employees. They help employees manage their budgets more easily while offering a benefit that genuinely improves their lives.”
Another key finding from the report is that 63% of employers who offer salary sacrifice car schemes do so with the aim of making electric EVs more affordable for their employees.
With rising living costs and a growing appetite for sustainable transport, Tusker said EV salary sacrifice schemes rapidly become a highly valued and cost-effective benefit, helping employees drive new, fully insured and maintained electric cars for a fixed monthly amount – often at significantly reduced costs thanks to tax efficiencies.
From the employer’s perspective, 38% of organisations cite National Insurance (NI) contribution savings as a major reason for implementing a scheme, while 37% view it as a cost-neutral benefit, requiring no additional budget to deliver meaningful value to staff. These savings create a win-win scenario: employees access a desirable benefit, while employers make financial gains without added strain on resources.
Organisations are also choosing to reinvest the NI savings they receive in strategic ways. Nearly half (47%) of employers channel these savings back into the business or other employee benefits, helping broaden their overall reward offering. Meanwhile, 23% choose to share the savings directly with employees, subsidising the cost of vehicles further and making the benefit even more accessible, especially for those on lower salaries.
The full report ‘Driving Loyalty Through Electric Cars’ can be viewed here.
