EV salary sacrifice calculator
An EV salary sacrifice scheme is normally cheaper than a private lease for 2026/27, because the sacrificed pay avoids income tax and National Insurance and the car is taxed as a Benefit-in-Kind at only 4% of its P11D value, under gov.uk's rules on tax on company cars. This calculator estimates the true monthly cost after both effects.
How does an EV salary sacrifice scheme save money?
Three numbers decide the real cost. First, the sacrifice cuts gross pay, so take-home drops by less than the sacrifice because income tax and National Insurance are no longer paid on that slice, under HMRC's guidance on salary sacrifice and PAYE. Second, an electric company car is a taxable benefit, charged on 4% of the P11D value at the driver's marginal income tax rate, as set out on gov.uk's tax on company cars page. Third, the true monthly cost is the take-home drop plus that Benefit-in-Kind tax. This tool works all three from the salary entered, so the marginal rate is correct even in the awkward bands.
What would I pay on an example EV?
Take a £110,000 salary and a £600 a month sacrifice for a £45,000 electric car. The salary sits in the £100,000 to £125,140 band, where gov.uk's Personal Allowance taper lifts the marginal rate, so the marginal saving here is about 62%: 40% higher-rate tax, the 20% Personal Allowance withdrawal, and 2% National Insurance. Take-home falls by about £228 a month. The Benefit-in-Kind is £1,800 a year, 4% of the P11D value, which costs £90 a month at that marginal rate. Adding them, the car costs an estimated £318 a month, against a headline figure of £600.
Below £50,270 the saving is smaller, around 28%, because only basic-rate tax and 8% National Insurance are saved. The scheme still works, but saves less.
Common questions
How does an EV salary sacrifice scheme save money?
You give up part of your gross salary in return for the car, so you pay no income tax and no employee National Insurance on the sacrificed amount. An electric car is still a Benefit-in-Kind, taxed at only 4% of the P11D value for 2026/27, so a little tax comes back. The net of those two is usually well below the headline lease price.
What is the Benefit-in-Kind tax on an electric car?
For 2026/27 an electric company car is taxed on 4% of its P11D value, at your income tax rate. On a £45,000 car that is a £1,800 benefit. The rate rises to 5% in 2027/28, 7% in 2028/29 and 9% in 2029/30, so later years cost more.
Why is salary sacrifice best between £100,000 and £125,140?
In that band every £1 of salary also withdraws 50p of Personal Allowance, so the marginal rate is 60% plus 2% National Insurance. Sacrificing salary there saves about 62%, and it can restore some Personal Allowance too. That is why higher earners in the taper band gain the most.
Do I still pay for the car if my take-home barely drops?
Yes. Your take-home falls by the sacrifice minus the tax and NI you no longer pay, and you also owe the small Benefit-in-Kind tax. The tool adds both together so the monthly figure is the real cost, not just the pay cut.
What happens if I leave my job?
Salary sacrifice car schemes are tied to your employment. If you leave, most schemes end the arrangement and you hand the car back, sometimes with an early-termination cost. Check the scheme rules before you commit, because this is the main risk with these deals.
What would I pay on an example EV?
On a £110,000 salary sacrificing £600 a month for a £45,000 car, the saving in the £100,000 to £125,140 taper band is roughly 62%. Take-home falls by about £228 a month, Benefit-in-Kind tax adds about £90 a month, giving an estimated true cost of about £318 a month against a headline figure of £600.
Sources & Rate Verification
Rates verified against official statutory guidance on 6 September 2026.