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Although the Employer’s National Insurance Contribution (NIC) is still payable (12.8%) on the provision of a car to the employee, this is typically substantially less than the Employer NIC that would have been paid on the salary being sacrificed, resulting in a financial saving of several hundred pounds over the term of a vehicle contract for the employer.

In a survey carried out by Employee Benefits Magazine in 2007, they found that 42% of employers pass the Employer’s NIC savings that the company makes onto the employee, 18% of companies split the savings between the employee and the company, and 39% do not pass any of the savings onto the employee at all.

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