Everything You Need To Know About Tesla Salary Sacrifice
For many people, driving a Tesla has become the ultimate symbol of modern motoring. Sleek design, futuristic technology, and unrivalled electric performance make Tesla one of the most desirable car brands in the world. But for a long time, affordability has been a barrier. Buying or privately leasing a Tesla often means committing to high monthly payments that stretch household budgets. That’s why salary sacrifice has become such a popular option in the UK for leasing a Tesla model.
Through a salary sacrifice electric car scheme, employees can now access Teslas at a fraction of the normal cost, thanks to government incentives and tax efficiencies. Whether it’s the Model 3 Highland with its impressive range, the versatile Model Y SUV, or the luxurious Model S, more drivers are discovering that a Tesla is finally within reach. In this guide, we’ll explore everything you need to know about Tesla salary sacrifice—how it works, how much you can save, and whether it might be the right option for you.
What Is Tesla Salary Sacrifice?
Tesla salary sacrifice is a variation of the broader EV Salary Sacrifice scheme. In simple terms, it allows you to give up part of your gross (pre-tax) salary in exchange for the use of a Tesla, leased by your employer through a provider. Because the sacrifice is made before tax and National Insurance are calculated, your taxable income is reduced, and your take-home savings increase.
At the same time, electric vehicles like Tesla benefit from extremely low Benefit-in-Kind (BiK) rates. For the 2025/26 tax year, the BiK rate for electric cars is just 3%, compared to anywhere between 20% and 37% for petrol and diesel cars. This means you only pay a very small tax charge for the benefit of driving a Tesla, making the scheme highly cost-effective.
The result is that employees often save between 20% and 50% compared to leasing a Tesla privately, depending on their tax bracket and salary sacrifice provider. For many higher-rate taxpayers, a Tesla salary sacrifice scheme is by far the most affordable way to drive one of the world’s leading EVs.
How Does a Tesla Salary Sacrifice Scheme Work?
The process starts with your employer. They set up a salary sacrifice electric ear scheme with a provider such as The Electric Car Scheme, Octopus EV, or another leasing partner. Once the scheme is in place, you can browse the Tesla models available.
When you’ve chosen your car—whether that’s a Model 3, Model Y, or one of Tesla’s premium models—your employer arranges the lease. Instead of paying for the car from your net salary, the lease cost is taken directly from your gross pay. This lowers your taxable income and generates savings on both Income Tax and National Insurance.
Most Tesla salary sacrifice packages are also all-inclusive. That means the monthly deduction usually covers the car itself, servicing and maintenance, insurance, road tax, and breakdown cover. Some providers also include a home charger installation or discounted charging rates, making it even easier to manage your Tesla.
In effect, you’re not just getting access to the vehicle—you’re signing up for a full, managed motoring package that makes Tesla ownership simple, predictable, and affordable.
Why Choose a Tesla Through Salary Sacrifice?
The key reason is simple: cost savings. A Tesla Model 3 Highland might cost around £636 a month on a personal lease. Through Tesla Salary Sacrifice, your effective monthly cost could fall to around £413. Similarly, a Tesla Model Y could be available for around £472 a month, once you account for the tax savings. These are significant reductions that put Tesla within reach for many who previously thought it was out of budget.
But the benefits go beyond just cost. A Tesla offers cutting-edge technology, from Autopilot driver-assist features to over-the-air software updates that continuously improve your car’s performance. When you access a Tesla through a salary sacrifice electric car scheme, you get all these premium features while also enjoying the convenience of an all-in-one package.
Employers also gain. Offering salary sacrifice for an electric car scheme allows companies to enhance their employee benefits package at no extra cost. It helps attract top talent, retain staff, and demonstrate a commitment to sustainability goals. Employers save on National Insurance contributions too, making it a cost-neutral or even cost-positive initiative.
The Tesla Models Available on Salary Sacrifice
Tesla’s line-up is perfectly suited to salary sacrifice because it combines desirable branding with practical electric ranges and low running costs.
The Tesla Model 3 Highland is often the most popular choice. With improved efficiency, enhanced styling, and an impressive electric range, it suits both commuters and long-distance drivers.
The Tesla Model Y has become one of the best-selling cars in the UK, thanks to its versatility as an SUV with strong performance and family-friendly practicality.
For those seeking a luxury experience, the Tesla Model S and Model X may also be available through some providers, though their higher list prices mean the monthly costs—even under salary sacrifice—are greater.
What unites all these models is the fact that they fall under the same electric car salary sacrifice framework, offering employees a tax-efficient route into Tesla’s premium ecosystem.
Key Benefits of Tesla Salary Sacrifice
The attraction of a Tesla Salary Sacrifice scheme is multi-layered. First, there are the financial savings. By paying from your gross salary, you reduce your taxable income and pay less tax overall. For higher earners, this can mean saving hundreds of pounds each month.
Second, the convenience is unmatched. With insurance, servicing, and breakdown cover often included, the scheme removes the hassle of managing multiple bills.
Third, there are the environmental benefits. Driving a Tesla means driving a zero-emissions vehicle, which helps reduce your carbon footprint. For employers, offering Teslas through salary sacrifice also supports corporate sustainability targets and bolsters ESG credentials.
Finally, there’s the prestige and innovation associated with Tesla itself. Few brands carry the same recognition, and for many employees, accessing a Tesla through salary sacrifice feels like a premium perk that adds real value to their job.
Things to Consider Before Choosing Tesla Salary Sacrifice
While the benefits are substantial, there are also some considerations to keep in mind.
One is the length of the lease. Most salary sacrifice agreements last between two and four years. If you leave your job during that time, you may be responsible for early termination fees, unless your employer has protections in place for redundancy or parental leave - but some providers like The Electric Car Scheme include all of these protections.
Another factor is your pension. If you’re in a defined benefit pension scheme, reducing your gross salary could impact your final pension entitlement. Always check how salary sacrifice will affect your retirement benefits before committing.
It’s also worth remembering that BiK rates will rise gradually over the coming years, reaching 9% by 2029. While this is still far lower than the rates applied to petrol or diesel cars, it will reduce the overall saving slightly.
Finally, you need to think about charging infrastructure. While Teslas have excellent ranges and access to the unrivalled Tesla Supercharger network, you’ll still need to ensure you have access to convenient charging—whether that’s at home, at work, or on the road.
Who Benefits Most From a Tesla Salary Sacrifice Scheme?
The employees who benefit most from Tesla salary sacrifice tend to be those in higher tax brackets, since the savings from tax and NI are greater. For example, a 40% taxpayer will see much larger reductions in effective monthly cost than someone on the basic rate.
That said, Tesla salary sacrifice is still advantageous for basic-rate taxpayers, especially if they value the convenience of an all-in-one motoring package and the prestige of driving a Tesla.
Employers also stand to gain significantly. By offering Tesla salary sacrifice, they can provide staff with access to a highly desirable benefit without increasing costs. In fact, they save on National Insurance contributions, while also aligning themselves with green policies and demonstrating forward-thinking corporate values.
The Future of Tesla and Salary Sacrifice
The combination of Tesla’s continued innovation and the government’s tax incentives means that the popularity of Tesla salary sacrifice is only set to grow. With the UK aiming for net-zero emissions, schemes like these are vital for accelerating EV adoption.
As salary sacrifice providers continue to evolve, expect to see even more added benefits. Some schemes already include discounted charging tariffs, workplace charging credits, or options to include a home charging unit. Others are exploring used EV options, which could make Tesla salary sacrifice accessible to an even wider range of employees.
Conclusion
So, what is Tesla Salary Sacrifice? In essence, it’s the application of the salary sacrifice electric car scheme to one of the most desirable EV brands on the planet. By giving up a portion of your gross salary, you gain access to a Tesla at a much lower cost than if you leased or bought it privately.
The combination of tax savings, low BiK rates, and all-inclusive packages makes Tesla salary sacrifice one of the most cost-effective ways to drive a Tesla today. Employers benefit from enhanced perks, employees enjoy massive savings, and the environment wins as more people make the switch to electric.
