loveelectric EV Salary Sacrifice for Small Businesses: How It Works When You Have Under 50 Staff

An employee has asked about getting an electric car through salary sacrifice. Your first thought might be that your company isn’t big enough to offer a salary sacrifice scheme, but what if it is? Small businesses can - and do - offer electric vehicle salary sacrifice schemes. 

Now part of Perkbox, the UK’s largest employee benefits platform, loveelectric works with small businesses throughout the country to provide electric vehicles through salary sacrifice. With no minimum headcount requirement, it’s possible to offer a scheme with just one employee. 

In this guide, we’re covering how salary sacrifice works for small businesses with under 50 employees, including how to get started and what happens if an employee leaves.

Can a Small Business Actually Offer EV Salary Sacrifice?  

Most UK employers operating PAYE can offer a salary sacrifice scheme, provided they meet their chosen provider’s underwriting requirements. There’s no legal minimum number of employees required, and a scheme can run for a single employee. 

Eligibility is what can catch some small businesses out. Every provider sets their own criteria, and some specialise in larger fleets. At loveelectric, we have no minimum headcount, allowing us to work with businesses of all sizes.  

Is there a minimum number of employees? 

There is no legal minimum for the number of employees you need to have in order to offer a salary sacrifice scheme. In reality, the minimum number is set by your chosen provider. However, some salary sacrifice schemes, such as loveelectric, don’t have a minimum headcount.

Many small businesses assume that salary sacrifice isn’t an option for them as providers have historically focused on larger fleets. As a small business, you can offer a salary sacrifice scheme, even if only one of your employees signs up. 

What makes a small business eligible? 

Your company needs to be a UK employer with a PAYE payroll. Most finance providers will assess factors such as profitability, trading history, and financial stability before approving a scheme. Typically, your company will need to be trading for at least 2 years. These requirements are often set by the leasing companies, rather than providers like loveelectric. 

These eligibility requirements enable leasing companies to assess business risk, just like they would for personal leases. If you’re comparing EV salary sacrifice with other employee benefits, our guide to employee benefits for small businesses explains how different options compare. 

Determine your company’s eligibility using our salary sacrifice eligibility checker.

How EV Salary Sacrifice Works When You’ve Only Got a Handful of Staff  

The process of offering a salary sacrifice scheme remains the same, whether you have 50 or 500 employees. The employer’s responsibilities include signing the agreement, running the monthly payroll deduction, and submitting a P11D annually. 

Your salary sacrifice provider will handle everything else, including the vehicle lease, insurance, maintenance, employee queries, and early termination scenarios. If you’re a small business without a dedicated HR team, you won’t be at a disadvantage when offering a salary sacrifice scheme. It’s a light-touch benefit with minimal hands-on involvement from employers.  

What you do vs what we do 

How long does setup take? 

Small businesses don’t need a dedicated HR team to set up their salary sacrifice scheme. The entire onboarding process is simple to follow, especially for SMEs. Our self-serve onboarding makes it easy for company directors and HR managers to apply for and set up their salary sacrifice scheme in as little as 7 days.

The setup process has low admin involved, meaning it won’t add to your workload as a small business owner or manager. If you’d like to learn more, our employer guide walks through each stage of how to set up an EV salary sacrifice scheme.

What does it cost a small business?  

There are zero upfront costs involved with an electric vehicle salary sacrifice scheme. It’s designed to be cost-neutral to run. As an employer, you don’t purchase the vehicle, as the lease is paid for by the employee’s sacrificed salary. The employer simply administers the salary sacrifice through payroll. 

An employee’s monthly lease payment comes from their gross salary, rather than their take-home pay. As a result, their Income Tax and employee National Insurance is calculated after the salary sacrifice, reducing the cost of driving an electric vehicle, compared to getting the same car through a personal lease.

The exact employee savings will depend on their salary, tax band, chosen vehicle, and lease cost. 

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Here’s an example of how salary sacrifice works:

An employee with a £75,000 salary leases a Tesla Model Y Long Range RWD.

They make a gross salary sacrifice of £793.

Their Income Tax saving = £293

National Insurance saving = £52

They’ll pay a Benefit in Kind (4% for 2026/27) tax of £52 per month.

The net cost is around £500 per month. This is lower than the cost of a personal lease for the same car with the added benefit of insurance and maintenance included.

The employer National Insurance Contribution savings often offset the ongoing administration involved in running the scheme, making it cost-neutral. You can learn more about employer National Insurance savings in our dedicated employer cost guide. 

“But what if my one EV driver leaves?”  

For many small businesses, their biggest concern about salary sacrifice is what happens if an employee leaves – especially if they’re the only employee to enrol in the scheme. With loveelectric, our Zero Risk Guarantee is designed to minimise the financial risk to employers that can arise if an employee leaves.

The Zero Risk Guarantee offers Day 1 assurance with marketplace support and early termination assistance. If an employee leaves, we’ll work with you to explore options such as transferring the lease, reallocating it to another employee, or remarketing the vehicle through the reloved® marketplace.

Learn more about our Zero Risk Guarantee and how it can offer added peace of mind for your small business.

Why small employers are choosing EV salary sacrifice  

Salary sacrifice schemes aren’t just for larger businesses and their benefits can often have a greater impact for SMEs – including for employees. 73% of employees consider EV salary sacrifice to be a valuable benefit, according to research by the BVRLA.

loveelectric was built on the belief that driving an electric vehicle should be accessible to everyone and not just those who work at large companies. We’re here to help small teams, young businesses, and first-time scheme employers to support businesses on their journey towards net zero and to make driving an EV more affordable.

With Perkbox, we’re helping small businesses improve their ESG credentials without having to make significant financial investment. Offering an EV salary sacrifice scheme can also give your business a competitive edge when recruiting and retaining talent that may be considering other companies.

How to start (and check if your business qualifies)  

Not sure if your business is eligible? It takes under a minute to check. At loveelectric, our sign-up process is designed to be as simple as possible for small businesses, streamlining the onboarding process. 

After completing an enquiry form, most small businesses get set up in as little as 7 days. The exact timeline will depend on how quickly our financing partners approve your application and if they need any further information. If your business has been trading for at least 2 years and is profitable, your application is more likely to meet typical lender criteria. 

FAQs  

What’s the minimum number of employees for a salary sacrifice scheme?

There is no legal minimum for the number of employees your business needs to have to offer a salary sacrifice scheme. Loveelectric has no minimum headcount.

Can a one-person limited company use EV salary sacrifice? 

Yes, a sole-director limited company qualifies for EV salary sacrifice if the director is paid via PAYE and the business is profitable.

Does it cost a small business anything to set up?

There is no upfront cost for your small business to offer an EV salary sacrifice scheme. These schemes are designed to be cost-neutral, and there is low admin involved.

What happens if my only scheme employee leaves?

You won’t be left holding the lease if your employee leaves. At loveelectric, our Zero Risk Guarantee offers Day 1 assurance for terminations, employee sickness, resignation, and redundancy. 

Is EV salary sacrifice worth it for a small business?

EV salary sacrifice is a win-win for small businesses as an affordable benefit that is typically cost-neutral or potentially cost-positive because of employer National Insurance savings. There’s low admin involved, and it’s a practical benefit that can save your employees up to 60% compared to getting the same vehicle on a personal lease.

Set Up Your EV Salary Sacrifice Scheme In Just 7 Days

You don’t need to have hundreds of employees to offer an EV salary sacrifice scheme. At loveelectric, we’re on a mission to make salary sacrifice accessible to businesses that have traditionally been underserved.  

With no minimum headcount, low admin, and our Zero Risk Guarantee, even a business with a single eligible employee can offer EV salary sacrifice. Not sure if your small business qualifies? Check your eligibility today or book a demo to speak with one of our salary sacrifice experts. 

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