Estimate for the 2026/27 tax year using GOV.UK and HMRC rates, not tax advice. Bar shows the real cost as a share of the gross sacrifice. Assumes salary is your only income and NI is worked out on an annual basis.
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This EV salary sacrifice calculator shows UK employees what an electric or plug-in hybrid car through a workplace salary sacrifice scheme really costs each month once income tax, National Insurance and company car tax are taken into account, and compares it with leasing the same car privately from take-home pay. It uses GOV.UK and HMRC rates for the 2026/27 tax year, including Scottish bands, and gives an estimate, not tax advice.
Quick answer: An EV salary sacrifice calculator takes the gross monthly sacrifice, removes the income tax and employee NI you no longer pay, then adds tax on the benefit in kind at 4% of list price for 2026/27. Example: a £450 a month sacrifice on £40,000 salary for a £35,000 EV costs about £347 a month.
What Is an EV Salary Sacrifice Calculator?
An EV salary sacrifice calculator is a tool that converts the gross amount you give up from your salary for a car into the real reduction in your take-home pay. In plain words: real cost equals the gross sacrifice, minus the income tax saved, minus the employee NI saved, plus the income tax on the car’s benefit in kind.
Salary sacrifice works because your employer leases the car and you agree to a lower contractual salary in return. Your cash pay falls, so the income tax and Class 1 NI charged on it fall too. The car then counts as a taxable benefit, but for an electric car that benefit is small: list price times the appropriate percentage, which HMRC sets at 4% for zero emission cars in 2026/27.
How Do You Use the EV Salary Sacrifice Calculator?
- Choose “Salary sacrifice car”, or “Company car tax only” if you just want the benefit in kind charge on a car your employer provides.
- Enter your gross salary before the sacrifice and whether you pay income tax in Scotland or elsewhere in the UK.
- Enter the car’s list price (the P11D value on your quote) and pick its band. Electric cars are 4%; plug-in hybrids depend on their electric range.
- Enter the gross monthly sacrifice from your scheme quote, and the monthly price of a personal lease for the same car and terms if you want a comparison.
- Enter your weekly contracted hours so the tool can check the National Living Wage rule.
- Read the real monthly cost, then open the breakdown to see each tax figure.
How Much Tax Do You Pay on an Electric Company Car in 2026/27?
For 2026/27 the taxable benefit of a zero emission car is 4% of its list price, so a £35,000 EV creates a £1,400 benefit and costs a basic rate taxpayer £280 a year, or £23.33 a month. HMRC’s appropriate percentage tables for company cars set these bands, updated on 6 April 2026.
| Car (CO2 and electric range) | 2026/27 BiK rate | Benefit on a £35,000 car | Tax a month at 20% | Tax a month at 40% |
|---|---|---|---|---|
| Electric, 0 g/km | 4% | £1,400 | £23.33 | £46.67 |
| Plug-in hybrid 1 to 50 g/km, 130 miles or more | 4% | £1,400 | £23.33 | £46.67 |
| Plug-in hybrid 1 to 50 g/km, 70 to 129 miles | 7% | £2,450 | £40.83 | £81.67 |
| Plug-in hybrid 1 to 50 g/km, 40 to 69 miles | 10% | £3,500 | £58.33 | £116.67 |
| Plug-in hybrid 1 to 50 g/km, 30 to 39 miles | 14% | £4,900 | £81.67 | £163.33 |
| Plug-in hybrid 1 to 50 g/km, under 30 miles | 16% | £5,600 | £93.33 | £186.67 |
| Petrol or hybrid, 155 g/km and above | 37% | £12,950 | £215.83 | £431.67 |
Employees pay no NI on a car benefit. The employer pays Class 1A NI at 15% of the benefit instead, according to the rates and thresholds for employers 2026 to 2027.
How Much Does Salary Sacrifice Save at Each Tax Band?
The higher your marginal tax rate, the cheaper the car: in the example below, each £1 of gross sacrifice costs about 77p for a basic rate taxpayer, 68p at the higher rate and 54p in the £100,000 to £125,140 band where the personal allowance is withdrawn. Every row uses a £450 monthly sacrifice for a £35,000 EV and a £450 personal lease as the comparison.
| Example salary and region | Tax saved a year | NI saved a year | Tax on BiK a year | Real cost a month | Cost per £1 | Saving vs personal lease a year |
|---|---|---|---|---|---|---|
| £30,000, England | £1,080 | £432 | £280 | £347.33 | 77p | £1,232 |
| £40,000, England | £1,080 | £432 | £280 | £347.33 | 77p | £1,232 |
| £40,000, Scotland | £1,134 | £432 | £294 | £344.00 | 76p | £1,272 |
| £60,000, England | £2,160 | £108 | £560 | £307.67 | 68p | £1,708 |
| £60,000, Scotland | £2,268 | £108 | £588 | £301.00 | 67p | £1,788 |
| £105,000, England | £3,160 | £108 | £760 | £241.00 | 54p | £2,508 |
| £130,000, England | £2,511 | £108 | £711 | £291.00 | 65p | £1,908 |
Notice two things the flat “20%, 40%, 45%” tables elsewhere miss. Above £50,270 the employee NI saving drops from 8% to 2%. And between £100,000 and £125,140, each £2 of income removes £1 of personal allowance, so the part of the sacrifice in that range saves an effective 60% in tax, and any car benefit that lands in it is taxed at 60% too. The EV salary sacrifice calculator works out the tax in full at both incomes, so a sacrifice that straddles a band is handled correctly.
Is EV Salary Sacrifice Cheaper Than a Personal Lease?
EV salary sacrifice is cheaper than a personal lease when the real monthly cost shown above is lower than the private lease price for the same car, mileage, insurance and term. A personal lease is paid from income that has already been taxed, so its price is its true cost.
Compare like with like. Scheme payments often bundle insurance, servicing, tyres and breakdown cover, while a private quote may not. Enter the personal lease price after adding any items it lacks. Early termination terms matter too: ask what happens if you leave the employer, go on parental leave or are signed off sick, because salary sacrifice depends on your continuing salary.
Charging is separate from the lease. To estimate the electricity side, our electricity cost calculator works from kWh and your unit price, and the solar EV charging calculator shows how much of a year’s driving rooftop panels could cover. A new home charger circuit must be installed by a qualified electrician to BS 7671.
What Rules Limit an EV Salary Sacrifice Calculator Result?
The main limit is the minimum wage: GOV.UK guidance on salary sacrifice and the effects on PAYE says an arrangement must not reduce cash earnings below the National Minimum Wage, which is £12.71 an hour from April 2026 for workers aged 21 and over. The tool flags any result below that rate.
- Cars with CO2 of no more than 75 g/km, which covers every electric car and plug-in hybrid, are always taxed on the normal benefit in kind. Above 75 g/km, the taxable value is the higher of the benefit and the salary given up, which removes most of the advantage.
- A lower salary can reduce statutory pay such as maternity pay if average weekly earnings fall below the lower earnings limit of £129 a week.
- Pension contributions, life cover and mortgage applications may be based on the lower salary unless your employer uses a notional salary. Check with HR.
- The tool assumes salary is your only income and works out NI on an annual basis. Payroll works NI out each pay period, so monthly figures can differ slightly.
Treat every EV salary sacrifice calculator result, including this one, as an estimate. It is not tax or financial advice; HMRC, your employer’s payroll team or a regulated adviser can confirm your own position.
Worked Example: £40,000 Salary and a £35,000 Electric Car
Example: an employee in England earns £40,000 and is offered a £35,000 list price electric car for a £450 gross monthly sacrifice. A personal lease for the same car and terms would cost £450 a month. These are the default inputs of the EV salary sacrifice calculator above.
- Annual sacrifice: £450 x 12 = £5,400. Cash salary falls to £34,600.
- Income tax before: (£40,000 minus £12,570) x 20% = £5,486. After: (£34,600 minus £12,570) x 20% = £4,406. Saving £1,080.
- Employee NI before: £27,430 x 8% = £2,194.40. After: £22,030 x 8% = £1,762.40. Saving £432.
- Benefit in kind: £35,000 x 4% = £1,400, taxed at 20% = £280 a year.
- Real cost: £5,400 minus £1,080 minus £432 plus £280 = £4,168 a year, £347.33 a month.
- Against the £450 personal lease: £102.67 a month, or £1,232 a year, cheaper. The employer also pays about £600 less NI a year.
Frequently Asked Questions
What is the BiK rate for electric cars in 2026/27?
The appropriate percentage for a zero emission car is 4% of the list price for the tax year 6 April 2026 to 5 April 2027, according to HMRC’s company car tables on GOV.UK. Plug-in hybrids range from 4% to 16% depending on their electric range.
Does salary sacrifice reduce my National Insurance?
Yes. Employee Class 1 NI is charged on cash pay, so a lower salary means less NI: 8% on earnings between £12,570 and £50,270 and 2% above that in 2026/27. No employee NI is charged on the car benefit itself.
Is salary sacrifice worth it for a basic rate taxpayer?
Often, but by less than for higher earners. In the example on this page a basic rate taxpayer pays about 77p for each £1 of gross sacrifice. It is worth it only if that real cost is lower than a comparable personal lease with the same inclusions.
Does this calculator work for Scotland?
Yes. Choose Scotland and the tool uses the six Scottish income tax bands for 2026/27, from the 19% starter rate to the 48% top rate. National Insurance is the same across the UK, so only the income tax figures change.
Can salary sacrifice take me below the minimum wage?
No. GOV.UK guidance says a salary sacrifice arrangement must not reduce cash earnings below the National Minimum Wage. From April 2026 the rate for workers aged 21 and over is £12.71 an hour, and the tool warns when your cash pay falls below it.
Is this EV salary sacrifice calculator tax advice?
No. It is an estimate based on GOV.UK and HMRC rates for 2026/27, assuming salary is your only income. Pension, student loan, statutory pay and other personal factors can change the result, so confirm your figures with your employer or a qualified adviser.
Checked October 2026 by the Solaxyra Editorial Team. Sources: GOV.UK: Company car benefit, the appropriate percentage (480 Appendix 2), GOV.UK: Income Tax rates and Personal Allowances, GOV.UK: Scottish Income Tax rates, GOV.UK: Rates and thresholds for employers 2026 to 2027, GOV.UK: Salary sacrifice and the effects on PAYE, GOV.UK: National Minimum Wage rates.