What HR Teams Need to Know About Public EV Charging and Tax Efficiency

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Making sense of salary sacrifice for the people who make it work

Electric vehicles are taking off in salary sacrifice schemes, and HR teams are at the heart of that success. You’re the ones ensuring every contract, deduction and benefit line makes sense - for employees, payroll and HMRC alike.

But as soon as “public charging” enters the conversation, the questions start flying:

• Is it taxable?*

• Does it count as a benefit in kind?

• What if an employee charges more than their allowance?

Let’s try and demystify it. Because with Paua Solo, public charging is not just simple - it’s tax-efficient, compliant, and easy to manage.

1. The basics: how salary sacrifice works

Salary sacrifice is an agreement between employer and employee to exchange part of gross salary for a non-cash benefit. The employee’s taxable pay falls, so they save income tax and National Insurance on the sacrificed amount.

The employer also saves 13.8% employers’ NI on the same amount.

For example:

- If an employee earning £50,000 sacrifices £100 a month for a charging allowance, their taxable pay drops to £49,900.
- They save £40 a month (at 40% tax) and you save £13.80 in employer NI. (Savings to the employee can be more as they can save NI also which varies between regions so we left it out for simpl

It’s a rare win-win.

2. Where public charging fits in

Until recently, most salary sacrifice schemes focused on the vehicle and, occasionally, home charging hardware. That left out a big part of the driving experience: public charging.

For employees without driveways - roughly 44% of the UK workforce

- that gap meant extra personal cost and less enthusiasm for the scheme.

By adding Paua Solo as part of the package, employers can let staff fund their public charging through gross salary, achieving the same tax efficiency as the car itself.

3. The two models HR needs to understand

When evaluating charging solutions, you’ll come across two structures. Knowing the difference is critical for payroll compliance.

A. Post-pay model (after use)

Employees charge their car as normal, the provider tallies the cost, and the employer deducts that amount from net pay later.

• Deduction occurs after tax.

• It may be treated as reimbursement, not salary sacrifice.

• Therefore no tax or NI saving applies.

Worse, if mis-categorised, HMRC could see it as a benefit in kind or an expense adjustment, creating future headaches.

B. Pre-tax (gross pay) model - Paua Solo’s approach

Employees agree upfront to sacrifice a fixed monthly amount (£25, £50, £75, or £100) That deduction happens before tax and NI are applied.

Paua loads that amount to their public charging account, ready to use on 65,000+ UK connectors

This is a cleaner salary sacrifice - contractually agreed, pre-tax, and audit-ready.

4. Why timing matters for tax

HMRC’s tends to focus on ensuring that the variation to contractual pay must be agreed before the employee becomes entitled to the benefit.

In plain English:

• If you decide the amount after they’ve charged, it may not be considered salary sacrifice.

• If you agree the amount before they charge, it is cleaner.

That’s why Paua Solo’s fixed monthly allowance model is safe. Each driver’s allowance is agreed in advance, deducted from gross salary, and mapped to a defined benefit (public charging).

5. Payroll made predictable

For HR and payroll, the joy of a fixed pre-tax model is predictability.

• Every employee’s deduction is known and constant. This minimises a rsk associated with minimum wage rules.

• Deductions appear as a simple line item on the payroll file.

• Paua issues a monthly invoice that matches those totals exactly.

• VAT is itemised and recoverable where applicable (20% standard rate, plus 15% service fee)

There are no variable adjustments, reimbursements or manual journal entries - and no arguments with finance about what’s taxable.

6. How it works step-by-step for HR teams

Here’s what it looks like in practice:

Step 1 - Agreement
The employee signs a salary sacrifice contract that includes both the EV lease and a fixed Paua charging allowance.

Step 2 - Payroll deduction
The allowance (e.g. £50/month) is deducted from gross salary alongside the car lease cost.

Step 3 - Paua top-up
Paua receives the pre-tax amount, applies it to the employee’s charge card, and manages any unused balance rollover.

Step 4 - Monthly reporting
You receive one consolidated invoice and the driver can access cheaper charging.

Step 5 - Audit trail
Every pound sacrificed aligns with a matching benefit record, satisfying HMRC’s audit trail requirements.

7. What happens if an employee uses more charging than their allowance?

This one comes up often.

If a driver exceeds their allowance, the extra spend is simply charged to their linked debit card. That additional cost sits outside the salary sacrifice scheme - treated as normal personal expenditure.

There’s no payroll complexity, no tax adjustment, and no employer liability.

Equally, if they use less than their allowance, the unused credit rolls over automatically for future months.

Simple, predictable, and compliant.

8. The tax benefits at a glance

Highest rate tax payers could save "up to 62%” savings when including employer NI and company-wide benefits but the employee-specific figure will usually sit in the 28–47% range.

9. Employer NI savings

For every pound an employee sacrifices, the employer also saves 13.8% in National Insurance.

Example:

100 employees each sacrifice £50/month for public charging.
Employer NI saving = £50 × 13.8% × 100 = £690/month.

That’s over £8,000 a year in payroll savings - on top of improved engagement and sustainability outcomes.

Fair, green, and fiscally responsible.

10. VAT and reporting clarity

VAT is often the part HR teams dread, but Paua’s structure keeps it transparent:

• Paua applies VAT at 20% to the service fee.

• VAT can usually be reclaimed by the scheme provider or employer.

• Each invoice clearly separates allowance value, service fee, and VAT.

No blurred lines, no guesswork, no spreadsheet chaos.

11. Common questions HR teams ask

Q: Is public charging a benefit in kind?
A: Not in Paua’s model. It’s part of a pre-tax salary sacrifice agreement, so it doesn’t attract separate BIK reporting.

Q: Do we need to change our payroll software?
A: No. The deduction is treated like any other fixed salary sacrifice item - same process as the car lease.

Q: What if an employee leaves?
A: The salary sacrifice stops; any unused allowance simply lapses. No tax complication.

Q: Can drivers apply different allowances for different roles or use cases?
A: Yes. Paua supports variable allowance levels (£25, £50, £75 and £100 per month) by employee or cost centre - but they remain fixed and contractual for each individual.

12. Why HR should care about tax certainty

Salary sacrifice works best when HR can confidently explain it to payroll, finance, and employees.

Paua Solo gives HR teams that confidence because:

• Every deduction is pre-defined and compliant.

• Payroll processing is clean and repeatable.

• Auditors get full traceability.

• Employees actually understand what they’re getting.

It’s a rare mix of clarity, compliance and simplicity - the holy trinity of HR benefits administration.

13. The bigger picture: HR as sustainability enabler

EV salary sacrifice isn’t just a tax perk; it’s a core part of an organisation’s sustainability strategy. HR teams that champion equitable, compliant benefits help their companies:

• Reduce carbon emissions faster.

• Build fairer employee engagement stories.

• Attract and retain purpose-driven talent.

Public charging through Paua Solo turns a payroll process into a sustainability outcome.

14. The takeaway

For HR teams, public EV charging doesn’t need to be complicated - or risky.

With Paua Solo, you can integrate a fully compliant, tax-efficient charging solution into your salary sacrifice scheme in five simple steps. You’ll give employees a fairer, cheaper, and greener way to drive, while your payroll stays clean and your auditors stay happy.

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One fixed deduction. One auditable trail. One confident HR team.

That’s the power of Paua Solo.

Paua Solo is the EV charge card solution for public charging in your salary sacrifice scheme. Contact Paua to learn how EV drivers can save up to 62% on public EV charging through salary sacrifice. Get cheaper, tax-efficient EV charging with Paua.

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*This content is for general information only and does not constitute tax advice.

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