As more businesses look for affordable, attractive benefits to support employees, the salary sacrifice car scheme for employers is becoming a go-to choice — and now there’s even better news. Plug-in hybrid electric vehicles (PHEVs) are being added to salary sacrifice schemes for the first time, making low-emission driving more accessible for staff who aren’t quite ready to go fully electric.
This update comes as 89% of employers requested a hybrid option to help more staff make the switch to greener motoring. Early uptake has already exceeded expectations.
Why Plug-In Hybrids Are a Game-Changer for Employee Benefits
Many employees love the idea of driving an electric car, but concerns around charging access and range can hold them back. PHEVs offer a “best of both worlds” solution:
- Electric driving for short journeys
- Petrol back-up for longer commutes
- Lower emissions than standard petrol or diesel cars
With more than 65 PHEV models now eligible, including options from Volkswagen, MG, Mercedes-Benz, Land Rover and Volvo, there’s plenty of choice for all budgets and lifestyles.
All vehicles offered meet a 74g/km CO₂ or lower threshold — far below the UK average of 106.8g/km for new petrol or diesel vehicles.
How Salary Sacrifice Works for Employers
A salary sacrifice car scheme for employers allows staff to exchange a portion of their gross salary for a brand-new car. Because the deduction happens before tax, both the employer and employee benefit from cost savings.
Key Benefits for Employers
| Benefit | Why it Matters |
| Low-cost benefit | No direct cost to the business |
| Boosts retention & recruitment | Attractive perk for new and existing staff |
| Reduces business emissions | Supports sustainability goals and ESG reporting |
| Simple to manage | Providers handle admin, compliance and roll-out |
| Works for EV and PHEV drivers | Wider appeal across the workforce |
Employers also receive annual Scope 3 emissions data to support sustainability reporting — a growing priority for most organisations.
Why Add Plug-In Hybrids to Salary Sacrifice Schemes?
Adding PHEVs makes salary sacrifice more inclusive and practical for everyday workers.
Perfect for:
- Employees without home charging
- Field-based workers or long-distance commuters
- Staff living in rented accommodation or flats
- Drivers unsure about going fully electric
“HR and employee benefits teams are telling us hybrids work for employees with longer commutes or limited charging access. It’s a benefit people want and use, and it creates staff loyalty.”
The Bigger Picture: A Shift in Company Car Culture
Salary sacrifice is one of the fastest-growing employee benefits in the UK fleet and automotive space. It now represents 11.9% of the UK leasing market, and continues to rise as employers move away from traditional company car schemes.
There is also increasing interest in:
- Used EV salary sacrifice options
- Second- and third-life EV leases to reduce costs and RV risk
This is helping employers offer more affordable options while supporting the UK’s net-zero journey.
How Fleet Service GB Helps Employers
If you’re considering introducing or expanding a salary sacrifice car scheme for employers, Fleet Service GB can support you with:
- Fleet management services
- Driver support and accident management
- Compliance and risk management
- EV transition support and guidance
Our services help businesses run safer, greener and more cost-efficient fleets — whether you operate PHEVs, EVs or a mixed vehicle fleet.
FAQs About Salary Sacrifice Car Schemes for Employers
What is a salary sacrifice car scheme for employers?
It’s an employee benefit where staff give up a portion of their gross salary in exchange for a car. It reduces income tax and National Insurance, making it cheaper than personal leasing.
Are plug-in hybrids included in salary sacrifice schemes?
Yes — for the first time, PHEVs are now being added to schemes to give employees more choice, especially if they’re not ready for a fully electric vehicle.
Do employers save money with salary sacrifice schemes?
Yes. Employers can save on National Insurance contributions and boost employee benefits without additional business costs.
Are PHEVs a good choice for company car drivers?
PHEVs are ideal for employees who want lower emissions and fuel costs but need flexibility for longer journeys or limited access to charging.
How can Fleet Service GB support my business with salary sacrifice?
Fleet Service GB offers fleet management, driver support, EV transition advice and accident management services to help businesses run efficient and safe fleets alongside their salary sacrifice schemes.
Does Fleet Service GB only support EV fleets?
No. Fleet Service GB supports petrol, diesel, hybrid and fully electric fleets — including mixed models as companies transition to sustainable mobility.
Is a salary sacrifice car scheme easy to set up?
Yes — most scheme providers handle the admin, communications, onboarding and compliance. Fleet Service GB can support as part of your wider fleet strategy.
Final Thoughts
Adding plug-in hybrids to salary sacrifice schemes makes the benefit more inclusive, practical and appealing for more employees — especially those not quite ready for full electric driving.
For employers, it’s a no-cost, high-impact benefit that supports staff wellbeing, retention and sustainability goals.