Salary sacrifice: pension and car
Salary sacrifice car calculator: what an electric car really costs you a month
Enter your salary, the monthly amount in the scheme quote and the car’s list price. You get the net monthly cost after the tax and NI you save and the benefit in kind tax you pay.
Independent site, not a government service. Relief is claimed through your pension provider, your payroll or HMRC (Self Assessment or the GOV.UK claim service).
Example, not your result yet· change a figure to see yours
Real cost a month
£314
Against £450 a month if the same payments came out of take-home pay: 30% less.
| Salary sacrificed a month | £450 |
| Income Tax saved a month | £169 |
| NI saved a month | £12 |
| Benefit in kind: 4% of list price | £1,680 a year |
| Company car tax a month | £45 |
| Saving against paying from net pay | £136 a month |
2026/27: electric car at 4%. Your employer pays £252 of Class 1A NI on the benefit and saves £810 of its own NI on the salary given up.
Cars up to 75 g/km keep the normal benefit-in-kind rules under salary sacrifice. The £2,000 cap of April 2029 is about pensions, not cars.
A car scheme takes a fixed monthly amount out of your gross salary, so you save Income Tax and National Insurance on it, and in return you pay company car tax on the benefit in kind. For an electric car the taxable benefit is the list price times an appropriate percentage set in section 139 of the Income Tax (Earnings and Pensions) Act 2003: 4% in 2026/27, 5% in 2027/28, 7% in 2028/29 and 9% in 2029/30. Cars emitting up to 75 g/km keep these normal rules under salary sacrifice (HMRC); others are taxed on the salary given up if that is higher. On £55,000, giving up £450 a month for a £42,000 electric car saves £169 of tax and £12 of NI a month and adds £45 of car tax, for a real cost of £314 a month instead of £450.
Figures checked by Radif Partners · Editorial policy · How the sums are done
Monthly cost by salary and tax year
The table keeps the same car and the same £450 a month, and changes salary and year. A basic rate taxpayer saves 20% tax and 8% NI; above £50,270 the saving is 40% and 2%, and between £100,000 and £125,140 the Personal Allowance taper adds to it. The rise in the appropriate percentage adds a few pounds a month each year.
| Salary | Real cost 2026/27 | Real cost 2027/28 | Real cost 2028/29 | Real cost 2029/30 |
|---|---|---|---|---|
| £35,000 | £352 | £359 | £373 | £387 |
| £55,000 | £314 | £328 | £356 | £384 |
| £80,000 | £317 | £331 | £359 | £387 |
| £130,000 | £302 | £317 | £349 | £380 |
Electric against plug-in hybrid
A plug-in hybrid with 40 miles of electric range is taxed at 10% in 2026/27, against 4% for an electric car. On the same £42,000 list price the hybrid costs £398 a month instead of £314, and £510 in 2028/29 when the rate becomes 18%. HMRC's guide 480, appendix 2 sets out the bands by range.
What the employer pays and saves
Your employer saves its own 15% NI on the salary you give up (HMRC rates for employers) and pays Class 1A NI at 15% on the benefit in kind: on this car £810 saved against £252 paid a year. That gap is why many employers offer the scheme. The calculator leaves out insurance, maintenance and home charging, which schemes often include, and early termination charges, which can be large if you leave the job. For the rates of each year and what they mean for a three or four year lease, see the guide to electric car benefit in kind rates. A pension sacrifice can be run on the salary sacrifice pension calculator.
Before you sign a lease
Salary sacrifice car schemes usually run for two to four years, so the rate that matters is the average over the lease, not this year's. A car taken on in 2026/27 for four years will be taxed at 4%, 5%, 7% and 9% in turn, and the calculator's year field shows each one. Check what happens if you leave the employer, go on parental leave or your pay falls close to the National Minimum Wage, since the sacrifice cannot take cash pay below it. Ask whether the employer passes on any of its NI saving, and whether your pension contributions are worked out on the salary before or after the car.