How salary sacrifice charging works, and how it saves 20 to 50%
A plain English guide to EV charging salary sacrifice: how the deduction works, what employees save by tax band, and what employers need to set it up.
20 August 2026 · 7 min read
Contents
Charging an electric car is the one running cost that has not fallen for most drivers. Home charging is cheap, but public charging often costs more per mile than petrol. Salary sacrifice fixes the maths by letting employees pay for charging out of gross pay instead of take-home pay.
This guide explains exactly how that works, what the saving looks like at each tax band, and what an employer has to do to offer it.
What salary sacrifice charging actually is
Salary sacrifice is an agreement between an employee and their employer to give up part of their gross salary in return for a non-cash benefit. It is the same mechanism already used for pensions, cycle to work, and electric car leasing.
With charging, the benefit is the cost of the electricity used to run the employee's electric car. The employee pays for charging through the scheme, the cost is deducted from gross salary, and income tax and National Insurance are calculated on the lower figure.
The result: charging is paid for with pre-tax income, so every pound spent costs the employee between 50p and 80p.
The saving, by tax band
The saving is the employee's combined income tax and National Insurance rate on the amount sacrificed.
| Tax band | Income tax | Employee NI | Total saving |
|---|---|---|---|
| Basic rate | 20% | 8% | 28% |
| Higher rate | 40% | 2% | 42% |
| Additional rate | 45% | 2% | 47% |
| Higher rate in the 60% trap (£100k-£125,140) | 60% effective | 2% | up to 62% |
Rates shown are for England, Wales and Northern Ireland; Scottish bands differ. Employers also save employer National Insurance on the sacrificed amount, which is why the scheme is usually cost neutral or better for the business.
A worked example
Take a higher rate taxpayer who drives 12,000 miles a year in an EV that does 3.5 miles per kWh, charging half at home and half in public.
- Annual energy needed: about 3,430 kWh
- Home half at 8p per kWh: about £137
- Public half at 20p per kWh: about £343
- Total charging cost: about £480 a year
Paid through salary sacrifice at a 42% combined rate, that £480 costs about £278. The employee keeps roughly £200 a year. For a driver who charges mostly in public at rapid rates, the same calculation regularly lands between £600 and £1,000 a year.
You can run your own numbers with our savings calculator.
How it works month to month
- The employee charges as normal. At home, at work, or at any of the 76,000+ public chargers reachable through The Charge Scheme app and card.
- They record their mileage. A monthly submission through the employee portal confirms business and personal usage.
- We calculate the cost. Home, workplace and public sessions are pulled into one clear monthly statement.
- Payroll applies the deduction. We send payroll-ready instructions; the gross deduction runs alongside existing deductions.
There is no reimbursement claim, no receipt chasing, and no separate expense process.
What employers need to do
Less than most HR teams expect. The scheme bolts on to any existing company car or EV salary sacrifice arrangement, so there is no need to change lease provider.
- Sign the agreement and confirm eligibility rules
- Add the deduction line to payroll
- Let us handle employee onboarding, comms and support
There is no cost to the employer to set up or run, and the employer National Insurance saving typically covers any internal admin. Full detail is on the how it works page, and payroll specifics are covered for finance and payroll teams.
The rules to stay the right side of
Three things matter for compliance:
- Gross pay must not drop below the National Minimum Wage after the deduction. Payroll should apply a floor check.
- The arrangement must be documented as a variation to the employment contract.
- Business mileage reimbursement is separate. If you also reimburse business miles, that runs through HMRC's Advisory Electricity Rate or actual cost evidence, which is what our Reimburse product handles.
Who benefits most
Any employee driving an EV benefits, but the saving is largest for drivers who charge in public, because the cost being sacrificed is higher. That is also the group most likely to be missing out today: the roughly nine million UK households with no off-street parking who cannot access cheap home rates.
That equity gap is the reason the scheme exists. Read more in why we created The Charge Scheme.
Next steps
If you want to see the numbers for your workforce, book a demo and we will model the saving against your headcount and EV uptake.
See what you could save on charging
Salary sacrifice takes 20-50% off the cost of EV charging, at home, at work and in public.
