Salary sacrifice explained

What is a Škoda salary sacrifice car scheme?

A car salary sacrifice scheme is an arrangement between an employer and an employee. The employee agrees to reduce part of their contractual cash salary in return for access to a car provided through the employer’s approved scheme.

The car is normally treated as a company car for tax purposes, so Benefit-in-Kind tax may apply. Eligibility, available cars, mileage limits, insurance, maintenance and end-of-contract arrangements are determined by the employer and its chosen scheme provider.

West End Garage can help employees and businesses explore suitable new Škoda cars, including electric models, from our retailers in Edinburgh, Dunfermline and Stirling.

The process

How does car salary sacrifice work?

1. Your employer offers or establishes a scheme.
   Salary sacrifice must be provided through an employer. Employees cannot normally arrange the scheme independently as a private retail purchase.
2. You confirm your eligibility.
   Your employer or scheme provider will check its employment, earnings, driving-licence and insurance requirements.
3. You choose an eligible Škoda.
   Available vehicles depend on the scheme provider, employer policy, budget and current vehicle availability.
4. Your employment terms are amended.
   You agree to a contractual reduction in cash salary for the stated term in return for use of the car.
5. The car is supplied through the scheme.
   The provider will confirm what is included, the agreed mileage, delivery arrangements and what happens at the end of the agreement.

A salary sacrifice car is generally not purchased in the same way as a personal PCP agreement. Ownership, early termination and end-of-contract options depend on the individual scheme.

For employees

Choosing a Škoda through salary sacrifice

If your employer offers a car salary sacrifice scheme, you may be able to choose an eligible new Škoda and make the agreed payment through a reduction in your contractual salary.

• Access to an eligible new Škoda through your employer’s scheme.
• A regular payroll deduction rather than separate personal car finance.
• Some schemes may include servicing, maintenance, breakdown cover, tyres and insurance.
• Electric cars can attract lower Benefit-in-Kind percentages than many petrol or diesel company cars.
• Local help comparing Škoda models, practicality, equipment and electric driving requirements.

Your employer or scheme provider must confirm your eligibility, the cars available and everything included in the agreement.

For employers

Supporting your employees with a Škoda car scheme

A properly managed car salary sacrifice scheme can provide employees with access to newer vehicles while helping an organisation support its staff-benefit and lower-emission vehicle objectives.

• An additional employee benefit that may support recruitment and staff retention.
• A route to help eligible employees access newer, lower-emission vehicles.
• Choice across Škoda hatchbacks, estates, SUVs and electric cars.
• Local vehicle support across Edinburgh, Fife, Stirling and Central Scotland.
• Guidance when identifying suitable Škoda cars for an approved scheme.

Employers remain responsible for scheme governance, payroll administration, employment-contract changes and ensuring deductions do not reduce an employee’s cash earnings below the applicable National Minimum Wage.

Tax year 2026/27

Electric Škoda cars and Benefit-in-Kind tax

For the 2026/27 tax year, a zero-emission company car has a Benefit-in-Kind percentage of 4%. The actual tax paid depends on the vehicle’s applicable list price, the employee’s tax position and the period for which the car is available.

Electric models such as the Škoda Elroq and Škoda Enyaq may therefore be suitable choices for eligible salary sacrifice schemes. Model availability and scheme eligibility must be confirmed before an order is placed.

What should I check before joining?

• The complete monthly cost and what the scheme includes.
• The Benefit-in-Kind tax applicable to the chosen car.
• Annual mileage limits and excess-mileage charges.
• Early termination provisions if your employment or circumstances change.
• Possible effects on pension calculations, mortgage applications, statutory payments or other earnings-related benefits.
• Insurance eligibility and permitted drivers.
• Home and public charging arrangements if you select an electric car.

Tax rules and individual circumstances can change. Employees should review the formal quotation and obtain independent tax or financial advice where appropriate. West End Garage does not provide tax advice.

Local Škoda support

Salary sacrifice car support across Scotland

West End Garage supports businesses, organisations and eligible employees from three Škoda locations in Scotland.

Explore the new Škoda range, return to Škoda Business or contact your nearest West End Garage Škoda retailer.

Helpful information

Škoda salary sacrifice frequently asked questions