Salary Sacrifice EV Calculator
Enter your gross salary, monthly lease cost, and car details to see exactly what a salary sacrifice EV scheme costs after tax relief, NI savings, and benefit-in-kind tax.
Reviewed by Richard Ross · Last updated April 2026
How Salary Sacrifice EV Calculator works
How the saving is calculated
Your monthly sacrifice reduces gross salary before income tax and National Insurance are deducted. The saving is the marginal income tax rate (20%, 40%, or 45%) plus the employee NI rate at your income level (8% below the upper earnings limit of £50,270, or 2% above it), applied to the full annual sacrifice amount. The benefit-in-kind tax — calculated as the P11D value multiplied by the BIK percentage — is then deducted from the gross saving to give the net annual benefit.
Why electric vehicles have such a low BIK rate
The benefit-in-kind rate for fully electric vehicles is set by HMRC and reflects government policy to encourage EV adoption. For 2026/27 the rate is 2%, rising to 3% in 2027/28 and 4% in 2028/29. At 2%, the BIK tax on a £35,000 EV is just £700/year — far below the income tax and NI saved on a typical sacrifice amount, making the scheme strongly positive for most employees. Petrol and diesel cars attract BIK rates of 15–37%, significantly eroding the tax advantage.
The employer NI passthrough
When you sacrifice salary, your employer saves 15% employer National Insurance on the sacrificed amount. Some employers pass all or part of this saving back as a discount on the lease cost. A 50% passthrough on a £500/month sacrifice translates to approximately £37.50/month off the gross cost. This passthrough is not universal — many employers retain the NI saving — so the default in this calculator is 0%. Adjust the passthrough percentage if your employer confirms a specific amount.
How much can you save? Worked examples at three salary levels
Your saving depends on your marginal income tax rate and whether your salary falls above or below the upper earnings limit (£50,270). Three examples, each using a £350/month EV lease on a £38,000 P11D car (BIK rate: 2% in 2026/27). Basic-rate taxpayer (£35,000 salary): Annual sacrifice £4,200 saves £840 in income tax (20%) and £336 in NI (8%), totalling £1,176. BIK tax: £38,000 × 2% × 20% = £152/year. Net monthly cost: £265 versus £350 gross — a 24% effective discount. Higher-rate taxpayer (£60,000 salary): The same sacrifice saves £1,680 IT (40%) and £84 NI (2% — salary is above the £50,270 upper earnings limit). BIK: £304/year. Net monthly cost: £221 — a 37% effective discount. Personal allowance taper (£110,000 salary): The taper between £100,000 and £125,140 creates an effective 60% marginal rate. The same £4,200 annual sacrifice saves £2,520 IT and £84 NI = £2,604 before BIK (£304/year). Net monthly cost: approximately £158 — a 55% discount on the gross lease cost.
Pension salary sacrifice and car salary sacrifice — the same mechanism
Both pension salary sacrifice and car salary sacrifice work identically from a tax perspective: the sacrificed amount is deducted from gross pay before income tax and NI are calculated, so the percentage saving is the same for each pound sacrificed. The difference is benefit-in-kind tax. Pension contributions attract no BIK — every pound of saving flows through intact. A car lease attracts BIK at the HMRC-published rate for that vehicle (2% for a fully electric car in 2026/27, rising to 3% in 2027/28 and 4% in 2028/29). For a basic-rate taxpayer, pension sacrifice saves exactly 28% (20% IT + 8% NI) on every pound; EV car sacrifice saves a similar amount minus the small BIK offset. Many employers running both schemes also pass their 15% employer NI saving from the car scheme into employees' pension pots as an additional contribution — worth asking your HR or fleet team about.
Further reading
Detailed worked examples for basic-rate and higher-rate taxpayers, including how employer NI passthrough affects the deal.
Salary Sacrifice Car: How Much Could You Actually Save in 2026? →Frequently asked questions
What is salary sacrifice for an EV?
Your employer leases an electric car and deducts the cost from your gross (pre-tax) salary. Because the deduction happens before income tax and National Insurance, you pay less than if you leased privately. For EVs the benefit-in-kind rate is just 2% in 2026/27, making it extremely tax-efficient.
How much can I save with salary sacrifice?
A higher-rate taxpayer typically saves 40-50% compared to a personal lease. A basic-rate taxpayer saves around 30-35%. The exact saving depends on your salary, the car's P11D value, and CO2 emissions.
Does salary sacrifice reduce my pension contributions?
If your pension is calculated on your pre-sacrifice salary (known as a salary reference scheme), there is no impact. Check with your employer — most large schemes protect pension contributions from salary sacrifice.
What happens if I leave my job during a salary sacrifice lease?
You typically have three options: transfer the lease to a new employer, take over the lease personally (at a higher cost since you lose the tax benefit), or make an early termination payment. The exact terms depend on your employer's scheme.
Can I salary-sacrifice a used car?
No. HMRC salary sacrifice rules require the vehicle to be a new car ordered through the employer's leasing provider. Used or pre-registered vehicles are not eligible.
Is pension salary sacrifice more tax-efficient than car salary sacrifice?
Pension salary sacrifice is marginally more efficient because there is no benefit-in-kind tax — every pound of tax saving flows through intact. Car salary sacrifice attracts BIK tax on the vehicle's value, which partially offsets the income tax and NI savings. For a fully electric car at the 2026/27 BIK rate of 2%, the offset is small, making EV salary sacrifice nearly as efficient as pension sacrifice. For petrol or diesel cars with higher BIK rates (15–37%), the offset is substantial and can make salary sacrifice less attractive. Use the pension salary sacrifice calculator to model both scenarios side by side.
Can I salary-sacrifice into both a pension and a car lease at the same time?
Yes, if your employer runs both schemes. Many large employers offer salary sacrifice for pension contributions and for car leases as separate arrangements. The savings stack: each sacrifice reduces gross pay before tax and NI, so you save income tax and NI on every pound sacrificed across both. The combined sacrifice must keep your take-home pay above the National Minimum Wage. Some employers also pass the employer NI saving from the car scheme into employees' pension pots as an additional contribution.
Does salary sacrifice reduce my National Insurance record for state pension purposes?
Only if your post-sacrifice salary falls below the Lower Earnings Limit (£6,423 in 2026/27). Above that threshold you continue to earn National Insurance qualifying years as normal, and your state pension entitlement is unaffected. For a typical salary sacrifice car scheme the monthly deduction is far smaller than the gap between the LEL and most employees' salaries. If your salary is close to the National Minimum Wage and sacrifice brings it near the LEL, check with your employer's payroll team before joining the scheme.
These calculations are estimates based on 2026/27 HMRC and DVLA rates. Speak to a lender or qualified financial adviser for a personalised quote.