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What is salary sacrifice and how does it work?

You might have heard of salary sacrifice schemes before, but what do they mean for business owners and employees? Let’s look at this popular leasing option in more detail, explore how they work for those involved and the unique benefits associated.

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What does salary sacrifice mean?  

A salary sacrifice scheme is offered by an employer and typically serves as part of a staff benefits package. It allows employees to sacrifice part of their salary, before tax and National Insurance contributions, to pay for a lease vehicle.

The lease payments are deducted straight from an employee's salary and treated as a pre-tax benefit. In return, employees have access to an affordable vehicle finance solution and are free to choose between exclusive car lease deals.

It’s typically only available on electric and hybrid vehicles that produce less than 75mg of CO2. This encourages staff to switch to newer electric and hybrid vehicles and take advantage of lower benefit-in-kind rates.

How do employees’ benefit?

Salary sacrifice leasing comes with several employee benefits. These include:

  • Choice of a wide range of vehicles to suit individual needs – from hatchbacks and SUV’s to executive saloons

  • Flexible contract terms – choose your own mileage and contract length

  • Maintenance and breakdown cover can be included

  • Savings on National Insurance and income tax contributions

  • Drive a brand-new vehicle every 2, 3 or 4 years and simply hand it back each time.

Why should employers consider salary sacrifice schemes?

Salary sacrifice leasing also has employer benefits, which include:

  • Improves your businesses sustainability credentials

  • If employees travel regularly for business purposes, leasing ensures they have reliable transport that is both fully maintained and insured

  • An alternative to business and fleet leasing – vehicles don’t need to be leased through the company

  • You can tailor the scheme to meet your business’ requirements

  • As an employer, you have control over who is eligible - usually available to permanent contract employees and dependant on length of service.

synergy at Interflora World Cup

Final Thoughts

If you’re a florist and have access to a salary sacrifice scheme, it’s a great opportunity to source an all-new vehicle on your own terms. You’ll first need to check if you’re eligible and whether leasing makes financial sense.

It’s also worth bearing in mind that you won’t own the vehicle and will need to hand it back at the end of the contract. Here at Synergy, we always recommend speaking to an accountant or tax advisor before deciding.

Whether you’re an employer or employee, our dedicated team are here to support you along the way. Get in touch with Synergy today and we can help tailor a scheme to match your business and employee needs.


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Synergy was recently awarded Best Customer Service Broker at the Broker News Awards, as voted for by industry peers. Recognised for best-in-class customer service, Synergy has also recently achieved the Feefo Platinum Trusted Service Award for the fourth consecutive year.




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