TL;DR
A fixed, pre-tax public charging allowance is smarter than pay-as-you-go for salary sacrifice EV schemes. It ensures predictability for drivers, simplicity for payroll, and compliance with HMRC rules. The model reduces admin, supports scaling, and gives employees a straightforward, stress-free benefit.
Why a Fixed Charging Allowance Beats Pay-As-You-Go Models for Salary Sacrifice Cars
Predictability, simplicity, and compliance; the winning combination
The salary sacrifice EV market is booming, and with it comes innovation in how charging is managed. Some providers now offer pay-as-you-go (PAYG) systems where employees charge freely, and costs are deducted after use. Others, like Paua, offer a fixed, pre-tax allowance that’s agreed in advance.
At first glance, PAYG looks flexible. But in the real world of payroll cycles, tax rules and employer reporting, flexibility can quickly turn into friction.
Here’s why a fixed charging allowance, on your salary sacrifice EV charge card, isn’t just simpler, it’s smarter, safer, and more scalable for every party involved.
1. The myth of “flexibility”
Pay-as-you-go feels modern. You charge when you like, and the system calculates what you owe at month-end.
The problem? That system relies on variable usage and retrospective deductions, both of which sit uncomfortably with salary sacrifice rules.
Under PAYG, an employee’s deduction changes each month depending on how often they’ve charged. Payroll has to adjust the figures manually, and because the deduction happens after charging, it’s arguably after-tax, not before.
It’s flexible for the driver, but messy for everyone else.
A fixed allowance flips that logic:
- The amount is pre-defined.
- The deduction is pre-tax.
- The process is consistent.
That’s flexibility re-imagined as reliability.
2. Predictability makes salary sacrifice work
Salary sacrifice thrives on predictability. Employees love knowing exactly what will leave their payslip each month; employers love knowing exactly what to deduct.
With Paua Solo’s fixed allowance model, drivers choose their level, typically £25, £50, £75, or £100 per month
That figure is locked in for the term of the car lease. It’s deducted from gross pay before tax, and loaded automatically onto the driver’s Paua EV charge card, ready to use on 65,000+ UK public connectors
The driver’s cost is predictable. Payroll’s deduction is predictable. The provider’s reporting is predictable.
Predictability isn’t boring, it’s the secret ingredient that makes salary sacrifice scalable.
3. Simplicity for drivers
EV drivers want freedom, not spreadsheets.
Under a PAYG model, they might:
- Receive variable deductions each month.
- Need to check payroll to understand what they’ve spent.
- Worry about tax implications if deductions aren’t consistent.
With Paua Solo’s fixed allowance:
- Their charging budget is clear upfront.
- Unused balance rolls over automatically.
- Any extra usage is simply billed to their personal card, outside the salary sacrifice structure, but without penalty.
They can charge as they please, without ever filing a receipt or chasing a reimbursement.
It’s EV charging that “just works.”
4. Clarity for payroll
For payroll teams, PAYG charging is a nightmare dressed as convenience. Every month brings a different figure, multiple data feeds, and the question: “Is this pre-tax or post-tax?”
Fixed allowances solve that instantly:
- One deduction. Same every month.
- Contractually agreed in advance.
- Automatically reflected in HMRC filings.
Payroll teams get a clean ledger, with no retroactive changes or tax ambiguity.
As one Paua partner put it:
“It’s the first benefit we’ve ever introduced that didn’t create a payroll headache.”
5. Compliance you can prove
HMRC’s salary sacrifice rules are explicit:
- The amount sacrificed must be agreed before the benefit is used.
- It must be clearly defined in the employment contract.
That’s impossible to achieve with a PAYG model where deductions depend on past activity.
With Paua Solo, every allowance is pre-agreed in writing. It’s a fixed reduction in gross salary, matched by a fixed public charging benefit. The paper trail is complete, from payslip to Paua invoice.
So if an auditor ever asks, “Show me how this works,” you can hand them the documentation, not a disclaimer.
6. Financial transparency for employers
Employers need benefits that are simple to explain, easy to manage, and fully defensible under audit.
The Paua Solo structure delivers all three:
- One consolidated monthly invoice per employer or cost centre.
- Transparent breakdowns showing allowance, VAT on service and service fee (15%)
- Clear linkage between payroll deductions and actual benefit value.
PAYG models can’t match that. They create noise, fluctuating costs, uncertain deductions, and opaque usage patterns.
Fixed allowances turn that chaos into calm.
7. Easier onboarding and communication
Explaining salary sacrifice to employees can be tricky enough without adding “variable deductions” into the mix.
With fixed charging, the conversation is simple:
“You’ll sacrifice £50 of gross pay each month for £50 of public charging credit.”
That’s a message everyone understands.
Scheme providers find it easier to train sales teams, HR teams can communicate clearly to staff, and drivers can make informed decisions quickly.
Simple to explain = simple to sell.
8. Better budgeting for everyone
A fixed monthly allowance isn’t just good for payroll; it’s good for drivers’ personal budgeting too.
They know exactly how much of their gross pay is going towards charging, no surprises, no fluctuations. For employers, this predictability helps forecast scheme costs and National Insurance savings accurately.
Providers can model margins with precision because every participant’s contribution is known upfront.
It’s stable economics in a market that’s often too volatile.
9. Scalability through automation
Paua Solo’s fixed-allowance model is designed for automation.
Once drivers are set up, everything runs in the background:
- Allowances load automatically.
- Cards and app access are managed by Paua.
- Reporting syncs via dashboard or API.
There’s nothing to recalculate.
Whether you’re managing 10 drivers or 10,000, the process is identical.
By contrast, PAYG models create a new reconciliation problem with every driver added. They scale admin, not adoption.
10. Avoiding tax and compliance pitfalls
PAYG systems blur the lines between salary sacrifice and expense reimbursement, and that’s where trouble starts.
If HMRC views a deduction as after-the-fact reimbursement, employees lose their tax relief, employers lose their NI saving, and scheme providers face audit exposure.
A fixed allowance avoids that entirely.
It’s pre-tax, contractual, and compliant by design.
In compliance terms, fixed allowances aren’t just safer, they’re better risk managed.
11. The numbers speak for themselves
In Paua’s business case, switching from PAYG to fixed-allowance models should produce:
- 78% higher scheme adoption, as drivers found costs easier to understand.
- Lower payroll errors (fewer discrepancies across thousands of deductions).
- Reduced admin time for employers by over 50% than those trying to do this manually themselves.
Predictability pays, literally.
12. In summary: why fixed wins
The final thought
In the race to make EV benefits easy, predictable beats flexible every time.
A fixed charging allowance gives scheme providers a structure that scales, employers a process that’s provable, and employees a benefit that’s genuinely simple to use.
It’s the model that saves time, saves admin, and saves face with auditors.
Fixed by design. Flexible in practice. Compliant forever.
That’s 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.
*This content is for general information only and does not constitute tax advice.
