Essentially there are only two things that you need to ensure to be able to participate in a salary sacrifice scheme whether that be for a car or other salary sacrifice benefits. Essentially you need to earn a salary sufficient to enable the sacrifice due under the Scheme to be made without reducing your post sacrifice, revised, salary below the National Living/Minimum Wage; and be aged 21 or over or in the case of Vavoom’s Scheme, over 18.
Whilst all employers are different, your employer may also stipulate that you:
- Are a permanent member of staff or on a fixed term contract, not on a temporary contract and no longer subject to a period of probation.
- Are not the subject of any disciplinary or redundancy proceedings or given notice of your intention to leave employment; and are not on long term sick leave, sabbatical or parental leave.
If your application to take part in the Scheme is accepted by your employer this does not in any way affect your employer’s rights to terminate your employment and in the case that this does happen you must return the vehicle.
Can anyone participate in salary sacrifice?
In short, yes, as mentioned above, providing your salary sacrifice doesn’t put you below minimum wage and you are a full time employee there is no reason why you shouldn’t be able to join your company’s salary sacrifice scheme.
One key factor which is not reflective of the employee is that the employee must have the salary sacrifice scheme available in order for the employees to participate. For example, if an employee sees a business like ours that provides a salary sacrifice scheme and wants to participate their employer must be the one that initiates the scheme, the employee can not.
Can part-time staff join a salary sacrifice scheme?
Yes, you might do part-time hours but as long as you are a full-time employee you can participate. As above the only reason why you wouldn’t be able to join is if participating in the scheme takes you below the minimum wage threshold.
Other Key Considerations for Part-Time Staff:
- Contractual Changes: Salary sacrifice requires a formal change to the employment contract, which part-time staff must formally agree to. This is nothing to worry about but at the employers discretion on what to add to your contract.
- Impact on Benefits: While it can provide tax/NI savings, part-time staff should carefully consider if the reduction affects their entitlement to state pensions or other government benefits.
- Employee Discretion: While open to part-time workers, employers may have specific criteria (e.g., length of service, or role) for joining.
What types of salary sacrifice schemes are there?
There a few different options that an employer can bring into their company for employees, including:
- Pension Contributions: The most common option that employers provide, allowing employees to boost retirement pots while reducing NI for both employer and employee.
- Electric Vehicles (EVs): Employers lease electric cars, and the cost is deducted from pre-tax salary, offering significant tax savings.
- Cycle to Work Scheme: Similar to the Electric Car Scheme, it allows for the purchase of bikes and safety equipment, with a monthly cost being taken out the salary pre tax. Again, reducing tax and NI.
- Technology & Devices: Purchase of laptops, smartphones, or tablets, often for hybrid/remote work in a similar set up to the above.
Can I be in more than one salary sacrifice scheme?
Yes. Whilst Vavoom only offers salary sacrifice car schemes, an employer can have multiple salary sacrifice schemes available to their employees. However, the same rule applies, if you want to be in all schemes, this can not take your earnings below the threshold for the National Living Wage so think about the ones that are needed in your life and that you will have the most benefit from being a part of.
How can Vavoom help?
As mentioned above, we can help provide businesses and employees with salary sacrifice schemes for Electric Vehicles. Our dedicated team is on hand to answer all questions whether you are an employer looking to introduce a scheme or an employee to be part of the scheme. We can help you.
Contact us if you want to get started on your new salary sacrifice scheme.
