UK Salary Sacrifice Car Calculator
Enter the gross deduction and P11D value from your electric-car quote. See the estimated take-home cost, audit a provider's advertised figure and compare the same car with a private lease on a like-for-like basis.
Published by GrowThenDraw Editorial Team · Editorial policy · Methodology & sources
| Annual item | Before | After / effect | Difference |
|---|---|---|---|
| Cash salary | £60,000 | £50,400 | −£9,600 |
| Car benefit | £0 | £1,800 | +£1,800 |
| Income Tax | £11,432 | £8,312 | −£3,120 |
| Employee NI | £3,211 | £3,019 | −£192 |
| Estimated cash after tax and NI | £45,357 | £39,069 | −£6,288 |
| Tax year | EV BIK rate | Annual benefit | BIK Income Tax | Scheme / month | Private / month |
|---|---|---|---|---|---|
| 2026/27 | 4% | £1,800 | £720 | £524 | £773 |
| 2027/28 | 5% | £2,250 | £900 | £539 | £773 |
| 2028/29 | 7% | £3,150 | £1,260 | £569 | £773 |
| 2029/30 | 9% | £4,050 | £1,620 | £599 | £773 |
Only the legislated EV BIK rate changes. Salary, P11D value, private costs and 2026/27 Income Tax and NI thresholds stay frozen.
These are employer amounts. They are not added to your saving because an employer does not have to pass them through and a provider quote may already reflect them.
Company car tax and BIK
Start from P11D price, CO2, availability and private fuel, then compare an optional cash allowance.
Check Child Benefit charge
Carry the adjusted-net-income change into the full partner and Child Benefit audit.
Pension salary sacrifice
Model pension funding, NI sharing, annual allowance and the employer pay floor separately.
Compare pension tax relief
Separate relief at source, net pay and pension salary sacrifice before changing deductions.
All UK calculators
Connect this pay decision with dividend tax, mortgages, investing and retirement.
A tax saving is not the same as a competitive car price
Salary sacrifice removes the entered deduction from contractual cash pay before Income Tax and employee National Insurance. A company car available for private use also creates a taxable benefit. The calculator recomputes both pay positions and shows the tax saving before BIK, the extra Income Tax caused by BIK and the final take-home cost separately.
That still does not prove that the employer quote is good value. A provider can price the lease above the open market or bundle services that a headline private price excludes. The private-cost builder spreads its upfront payment across the term and adds insurance, maintenance, tyres, VED, breakdown and other entered costs before comparing the two routes.
Why the provider's net figure can differ from this estimate
A provider illustration may use a different salary, tax code, pay frequency, pension basis, student-loan plan, availability period or P11D value. It may also include an employer National Insurance contribution, a future tax year or costs that appear elsewhere in the quote. A difference is a question to reconcile, not proof that either figure is wrong.
GrowThenDraw uses a final annual 2026/27 Income Tax comparison and annualised regular-pay category-A National Insurance. It does not reproduce exact payroll periods or an employer's payslip. Use the visible audit table to identify the assumptions that payroll or the provider needs to confirm.
The electric-car BIK rate rises during a typical lease
The appropriate percentage for a zero-emission company car is 4% in 2026/27, 5% in 2027/28, 7% in 2028/29 and 9% in 2029/30. It is applied to the P11D/list price including taxable accessories, not the discounted lease price. A £45,000 car therefore creates a £1,800 full-year benefit at 4%, before Income Tax is calculated.
The projection changes those legislated BIK percentages but deliberately freezes 2026/27 Income Tax and NI thresholds. Future fiscal thresholds, salary changes and inflation are unknown. The result is a sensitivity illustration, not a future payslip forecast.
Employment and pension terms can outweigh the headline saving
Salary sacrifice cannot reduce cash earnings below National Minimum Wage in the applicable pay reference period. Reduced contractual pay can also affect statutory pay, contribution-based benefits, life cover, mortgage evidence, bonus calculations and pensionable pay. Some employers protect these using a notional reference salary; others do not.
Defined-benefit arrangements, including NHS employment, need scheme-specific confirmation. This calculator does not invent a pension-loss number. Ask payroll and the pension administrator for an illustration, then weigh that evidence with mileage limits, insurance restrictions, early-termination protection and the cost of leaving employment.
Frequently asked questions
How is the net monthly cost of an EV salary sacrifice calculated?
The tool compares annual cash pay before and after the sacrifice, recalculates Income Tax and category-A employee NI, then adds the Income Tax caused by the company-car benefit. The annual take-home difference is divided by the months the car is available in the current tax year.
What P11D value should I enter?
Use the P11D or list price including taxable accessories shown in the employer or leasing-provider quote. Do not use a discounted lease price, cash purchase discount or the total of monthly payments.
Is electric-car BIK 4% in 2026/27?
Yes. HMRC's 2026/27 appropriate-percentage table gives a 4% rate for a car with zero CO2 emissions. Legislated rates then rise to 5% in 2027/28, 7% in 2028/29 and 9% in 2029/30.
Why does the calculator disagree with my provider quote?
Common causes include a different tax code or tax year, Scottish tax, pension or student-loan deductions, payroll frequency, a part-year car, employer NI sharing, a different P11D value or services included outside the displayed net figure. Use the audit rows and ask payroll which assumption differs.
Is salary sacrifice cheaper than a private lease?
It can be, but not automatically. Compare the same vehicle, mileage and term, spread any private upfront payment across the contract, and include insurance, maintenance, tyres, VED and other costs on both sides. The calculator does this with your figures rather than assuming that tax saved equals profit.
Does the result include pension or NHS pension effects?
No. Employers may use either notional pay or reduced cash pay for workplace benefits, while defined-benefit consequences are scheme-specific. Obtain an employer and scheme illustration instead of applying a generic percentage to the quote.
UK salary-sacrifice car and company-car rules verified 2026-09-17:
- GOV.UK: salary sacrifice, contractual pay, benefits and National Minimum Wage
- HMRC EIM44060: low-emission cars and optional remuneration
- GOV.UK: company-car and fuel benefit calculator
- HMRC: 2026/27 company-car appropriate percentages
- HMRC: zero-emission company-car rates for 2028/29 and 2029/30
- HMRC: 2026/27 PAYE, Class 1 and Class 1A rates and thresholds
- GOV.UK: company-car reporting and employer Class 1A
Scope: one pure zero-emission company car; one employment; final annual 2026/27 non-savings Income Tax for England, Wales and Northern Ireland or Scotland; annualised regular-pay category-A employee NI; supplied P11D value; entered current-year availability; and an illustrative term comparison that changes only legislated EV BIK rates.
Excludes petrol, diesel and plug-in hybrid rates; tax codes; exact payroll periods; directors and other NI letters; student or postgraduate loans; savings and dividend tax; HICBC and benefits; defined-benefit or employer-specific pension loss; capital and private-use contributions; shared cars; complex unavailability; early-termination charges; contract suitability; and personalised tax, payroll, pension, employment or financial advice.