Scheme Details


Salary Deduction

Some organisations offer a choice of how you pay for the car; the traditional method is by salary deduction where the car rental is taken from your net pay (after income tax, NIC etc has been deducted)

Some organisations have now agreed to allow employees to choose to take the payment from gross pay (before income tax, NIC etc has been deducted) and this will reduce the amount of income tax, NIC and pension contributions you make this is called Salary Sacrifice.

Salary Sacrifice

Salary Sacrifice reduces the cost of car leasing because you will save on Income Tax, National Insurance and Pension Contributions on the amount you sacrifice. However, it may impact on maternity pay or your pension and can affect your entitlement to state benefits and tax credits.   You should consider the possible effects before you decide to go ahead with a change in your employment contract.


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