EV salary sacrifice calculator
Almost every electric car salary sacrifice calculator online is run by a company selling the scheme. This one has nothing to sell: it shows the honest arithmetic, the income tax and National Insurance you save by sacrificing the lease cost, minus the 4% benefit-in-kind tax you pay on the car, and every step of the working.
A £450.00/month EV lease really costs you
£350.67 a month
£99.33/month (22%) cheaper than paying the same lease from taxed income, the tax and NI saved on the sacrifice far outweigh the £26.67/month of benefit-in-kind tax.
The arithmetic, in the open
| Gross pay sacrificed | £5,400.00 /yr |
| Take-home actually falls by | £3,888.00 /yr |
| BiK tax (£40,000 × 4% at your marginal rate) | £320.00 /yr |
| True annual cost of the car | £4,208.00 |
Assumes a pure EV at 4% BiK and that the quoted lease is the full gross sacrifice (most schemes bundle insurance and maintenance into it). The sacrifice cannot take pay below the National Minimum Wage, and it reduces pensionable pay and statutory pay references, the same caveats as any salary sacrifice.
Why the deal is genuinely good
A basic-rate taxpayer funds the lease with 72p-pounds instead of £1-pounds (40%+ savers do even better), while the benefit-in-kind charge on a pure EV is only 4% of the car's list price, a fraction of the 20-37% charged on petrol and diesel. The result is a 20-40% discount on driving a new EV, funded by the tax system. It is one of the few salary sacrifice arrangements where the announced 2029 £2,000 NI cap on pension sacrifice does not apply, car schemes have their own rules.
What the sellers underplay
- Early-termination risk: leave the job and the lease usually follows you or ends with a fee. Check the scheme's protection terms before signing.
- Reduced reference pay: the sacrifice lowers the salary used for mortgage applications, maternity pay and redundancy calculations.
- The BiK rate rises: 4% now, on a published path upward each April, so a 3-year quote should use the rate for each year, not today's throughout.
- Near £100k? The sacrifice helpfully reduces adjusted net income, but the BiK value adds back, run both numbers.
BiK percentages checked 2026-08-28 against HMRC's appropriate-percentage appendix. Related: company car tax · pension salary sacrifice.