Salary Sacrifice vs Buying Outright Calculator
Is a salary sacrifice EV scheme cheaper than buying the same car outright? Enter your salary and scheme details to see the net cost after tax and NI savings compared to the cash price.
Frequently asked questions
How does salary sacrifice save money on an EV?
You lease the car from your gross salary, before income tax and National Insurance are deducted. This means you save tax at your marginal rate (20%, 40%, or 45%) plus NI (8% or 2%) on the lease amount. The only tax you pay is BIK at 2% on the P11D value for a fully electric car in 2026/27.
Does salary sacrifice affect my pension contributions?
If your pension is calculated on your pre-sacrifice salary (which most employers arrange), it will not be affected. Check your employer's scheme rules. Some employers reduce pension contributions based on the lower post-sacrifice salary.
What happens if I leave my employer during the scheme?
You typically have to either take over the lease personally (at the gross cost, losing the tax benefit) or pay an early termination fee. Check your scheme's early exit terms before signing up.
Is salary sacrifice only available for electric cars?
In practice, yes. The tax benefit depends on low BIK rates. Electric cars have a 2% BIK rate in 2026/27, making the savings substantial. Petrol and diesel cars have BIK rates of 20-37%, which usually eliminates any savings from the salary sacrifice arrangement.
Does this calculator include insurance and maintenance?
The salary sacrifice lease payment typically includes insurance, maintenance, tyres, and breakdown cover. The outright purchase price does not include these ongoing costs, so the real saving from salary sacrifice may be even larger than shown.
These calculations are estimates based on 2026/27 HMRC and DVLA rates. Speak to a lender or qualified financial adviser for a personalised quote.