Electric car salary sacrifice calculator

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.

Can you salary sacrifice a petrol or hybrid car?

Yes — most schemes are a general salary sacrifice car scheme, and the car lease can be a petrol, diesel or hybrid rather than an EV. The arithmetic is just worse: instead of the 4% benefit-in-kind rate on a pure EV, a hybrid is charged 4% to 16% depending on its electric range, and petrol and diesel cars run up to the 37% cap by CO₂, so the BiK charge eats most of the tax the sacrifice saves. Car lease salary sacrifice on a petrol car can still edge out a personal lease because the National Insurance saving survives, but the headline discounts this page shows belong to EVs alone.

Source: HMRC 480 appendix 2, appropriate percentages, checked 2 September 2026.

Using an EV sacrifice to get under £100,000

This is the reason a lot of people near the taper look at these schemes at all, and the arithmetic has two halves that pull in opposite directions. Sacrificed pay never becomes taxable pay, so it comes off adjusted net income in full. The car itself is a taxable benefit, so its benefit-in-kind value goes back on. The net reduction is the sacrifice minus the BiK charge, not the sacrifice.

On £108,000 of income, sacrificing £12,000 a year for an EV with a £45,000 list price: the BiK value is 4% of list, or £1,800. Adjusted net income becomes £108,000 − £12,000 + £1,800 = £97,800. A net reduction of £10,200, not £12,000. The gap between those two figures is what catches people out when they are budgeting the last few thousand to get under the line.

There is a rule underneath this that makes EVs a special case, and it is worth knowing because it does not apply to most sacrifice schemes. Under the optional remuneration arrangement rules you are normally taxed on the greater of the benefit value or the salary you gave up, which cancels the saving entirely. Cars emitting 75g/km of CO₂ or less are excluded from those rules, so an electric car is taxed on its benefit value alone. Sacrifice a petrol car and the exclusion does not apply, which is the real reason the EV version of this deal works and the petrol version does not.

If the aim is childcare, check the test first. Tax-Free Childcare and the funded hours are withdrawn on adjusted net income over £100,000 per parent, not per household. If the other parent is also over the line, bringing your own figure down restores nothing, and a lease runs for years. The childcare cliff calculator tests it per parent.

Sources: HMRC 480 appendix 2 for the 4% rate, and HMRC EIM44060 for the 75g/km exclusion from the optional remuneration rules. Checked 22 September 2026.

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 reduces adjusted net income, but the BiK value adds back, so the net reduction is smaller than the sacrifice. The arithmetic is above.

BiK percentages checked 2026-08-28 by Hadi against HMRC's appropriate-percentage appendix. Related: company car tax · pension salary sacrifice.

How to use the electric car salary sacrifice calculator

1. 1

   Enter the monthly lease cost of the car from your employer's scheme.

2. 2

   Enter your salary so the sacrifice is priced at your own marginal rate.

3. 3

   Read the real cost after the tax and National Insurance you no longer pay.

4. 4

   Add the benefit-in-kind charge, which is low for electric cars but not zero.

When should you use the electric car salary sacrifice calculator?

Use it when your employer runs a car scheme, whether the car is electric or not, to see the cost after the tax you no longer pay.

Where to go next

• Salary sacrifice calculatorTo the same mechanics for pension and other benefits.Open
• Company car tax calculatorTo a traditional company car instead.Open
• Benefit in kind calculatorTo how benefits in kind are taxed generally.Open

All 51 calculators share one tested engine, so a figure from the electric car salary sacrifice calculator agrees with every other page here. See the full calculator index or the pay and tax guides.