EV Salary Sacrifice on Maternity Leave: What Employees and Employers Need to Know

"Do I have to give the car back?" is the question we hear most from employees going on leave, and the one HR teams ask before they'll roll a scheme out at all. The good news: in most cases, no.

Whether the car stays comes down to a single, clearly defined threshold - not employer discretion, and not guesswork. This is general guidance, not legal or tax advice; loveelectric confirms the specific position for each employee directly.

The rule: does the car stay or go?

Under loveelectric's scheme, if your pay during parental leave stays above the greater of the National Minimum Wage or Statutory Parental Leave Pay, your salary sacrifice deductions continue and you keep the car.

The two comparison figures, for the 2026/27 tax year:

• National Living Wage (age 21+): £12.71 an hour, from 1 April 2026 (Source: gov.uk, Rates and thresholds for employers 2026 to 2027).
• Statutory Maternity, Paternity, Adoption or Shared Parental Pay: £194.32 a week, or 90% of average weekly earnings if that's lower (Source: gov.uk, Rates and thresholds for employers 2026 to 2027).

The rule takes whichever of those two figures is higher as the bar. If your pay clears it, nothing changes. If it doesn't, the car needs to go back. This applies identically to statutory maternity leave, adoption leave, paternity leave and shared parental leave - it isn't maternity-specific.

If the car stays - what changes during leave?

Very little. Your salary sacrifice deductions continue from whatever pay you're receiving, and Benefit-in-Kind tax keeps applying at the standard electric car rate - 4% for the 2026/27 tax year (Source: gov.uk, company car appropriate percentages, 480: Appendix 2). Your employer notifies loveelectric that you're on parental leave; no other action is needed on either side.

Here's a worked example. Say you earn £40,000 a year and your employer pays enhanced maternity pay of 90% of salary for the first 6 weeks. That works out well above both the National Living Wage and the standard statutory rate of £194.32 a week, so your deductions continue and you keep the car through that period without any changes. 

Once any enhanced pay period ends, pay typically drops to the standard statutory rate. Whether that clears the "greater of NMW or Statutory Parental Leave Pay" threshold depends on your normal hours and earnings, so loveelectric checks this directly with you rather than leaving it to guesswork. Salary sacrifice cannot continue on any statutory parental leave pay alone, so if your pay consists solely of this, the car will be returned If the car must come back - what happens and what does it cost?

If your pay falls below the threshold, the process is straightforward: you notify your employer, your employer notifies loveelectric, and the car is collected and listed on our ReLoved marketplace for another employee to take on - it doesn't just sit unused.

The fee is the employee's, not the employer's - your business isn't charged for a parental leave return. Most returns during parental leave happen well after month three of the lease, so the one-month figure is the one that applies in practice for most people.

This fee structure is deliberately different from - and, in the first three months, more expensive than - the Employee Commitment Fee that applies when someone resigns or is made redundant. The two shouldn't be confused; see our guide to what happens when an employee leaves for how that compares. When you're ready to drive again, you can simply re-apply for a car through the scheme.

A note for employers: what you need to do

Your part is simple. Notify loveelectric when an employee goes on parental leave, and we'll confirm whether their pay meets the threshold - you don't need to calculate this yourself.

Either way, there's no liability on your business. If the car stays, deductions continue as normal from the employee's pay. If it doesn't, the return fee sits with the employee, not the company, and the car is redeployed rather than left as a stranded cost.

Frequently Asked Questions

Q: Can you keep a salary sacrifice car during maternity leave?

A: Yes - if your maternity pay stays above the greater of the National Minimum Wage or Statutory Maternity Pay (£194.32 a week for 2026/27), your deductions continue and the car stays with you (Source: loveelectric Driver Handbook; gov.uk).

Q: What if my maternity pay drops below that threshold?

A: You'll need to return the car. loveelectric lists it via the ReLoved marketplace, and you pay a capped fee - typically one month's rental if you're past month three of your lease.

Q: Does the same rule apply to paternity and adoption leave?

A: Yes - the same threshold and fee structure apply to maternity, paternity, adoption and shared parental leave equally.

Q: Does the employer pay anything if an employee's pay is too low to continue?

A: No. If a return fee applies, it's the employee's, not the employer's.

Q: Can I re-join the scheme when I return from parental leave?

A: Yes - you can re-apply for a car through the scheme when you return to work, subject to the usual eligibility criteria at that point.

Parental leave doesn't have to mean losing your car - and where it does, the process is clear and the cost is capped rather than open-ended. If you're setting up a scheme for your whole team, see how loveelectric's Zero Risk Guarantee supports your business more broadly, or read our guide to salary sacrifice edge cases around NMW and sick pay.