Salary Sacrifice Car Calculator
See what an electric company car really costs through a salary sacrifice scheme, after the income tax and National Insurance you save and the Benefit-in-Kind you pay. Built to current HMRC rates.
Salary sacrifice lets an employee give up part of their gross salary in exchange for a benefit, in this case a car, before income tax and National Insurance are worked out. Because the sacrifice comes out of pre-tax pay, the employee saves the tax and NI they would have paid on that money.
For electric cars the maths is compelling. The Benefit-in-Kind (BIK) rate on a fully electric car is just 3% for 2025/26 (rising slowly after that), so the tax due on having the car is tiny compared with the tax and NI saved on the salary given up. We run these schemes as part of managing your fleet, so the calculator below shows you roughly where an employee would land.
Estimate only, not tax advice. Figures use current HMRC BIK bands and frozen thresholds for the selected tax year and assume England/Wales rates; Scotland has different income tax bands. Personal circumstances vary, always confirm with a qualified adviser before entering a scheme.
Ready to offer this to your team?
We set up and run electric car salary sacrifice schemes for UK companies as part of managing your fleet. Talk to us and we will handle the cars, the paperwork and the day-to-day.
How it works
Why electric cars are so tax-efficient
Two things happen when an employee takes a car through salary sacrifice. First, they give up some gross salary, so they no longer pay income tax or National Insurance on that amount. Second, having a company car is a taxable benefit, so they pay Benefit-in-Kind tax on it. The scheme is worthwhile whenever the tax and NI saved on the salary is more than the BIK tax due, and for electric cars it comfortably is.
BIK is a percentage of the car's P11D value, set by HMRC based on emissions. Electric cars sit at the very bottom of the scale:
| Tax year | Electric (0 g/km) | Petrol / diesel |
|---|---|---|
| 2025/26 | 3% | up to 37% |
| 2026/27 | 4% | up to 37% |
| 2027/28 | 5% | up to 37% |
So on a £40,000 electric car the taxable benefit in 2025/26 is only about £1,200 for the whole year, whereas the same money taken as an equivalent petrol car could be taxed on £14,000 or more. That gap is why salary sacrifice makes sense for EVs and rarely for petrol or diesel.
The benefits
Good for your people, good for your business
For your employees
A brand-new electric car for noticeably less than leasing privately, because it comes out of pre-tax pay. Insurance, servicing, tyres and breakdown cover are usually bundled into one fixed monthly figure, so there are no surprise bills.
For your business
A valuable, no-cost benefit that helps you attract and keep staff, plus a saving on employer National Insurance for every car taken. It supports your sustainability goals too, and we handle the administration as part of managing your fleet.
FAQ
Salary sacrifice questions
Is salary sacrifice worth it for an electric car?
For most people, yes. Because electric cars are taxed on such a low Benefit-in-Kind rate, the income tax and National Insurance saved on the sacrificed salary usually outweigh the tax due on the car, so the net cost is well below leasing the same car privately.
Does salary sacrifice reduce my pension or other benefits?
It can. Sacrificing salary lowers your gross pay, which may affect pension contributions, mortgage affordability or statutory pay that are calculated on salary. It is worth checking these before you commit.
What happens if an employee leaves?
Schemes include early-termination protection so the business is not left exposed. We set this out clearly before anyone signs up.
Is salary sacrifice only for electric cars?
No, but it makes the most sense for electric and very low-emission cars. Petrol and diesel cars carry a much higher Benefit-in-Kind charge, which usually cancels out the saving.
Do you handle the scheme for us?
Yes. As your outsourced fleet department we manage the setup, the paperwork and the day-to-day running, alongside the rest of your fleet.
Ready to take control of your fleet?
Talk to us today. Based in Chesterfield, we cover the whole of the UK.