Salary Sacrifice & BIK

Get a Tesla through your employer's EV salary-sacrifice scheme? See what it really costs from your take-home pay once income tax and National Insurance savings and Benefit-in-Kind tax are counted — year by year as the BIK rate rises — and how that compares with leasing or buying the same car yourself.

This is a UK calculator. EV salary sacrifice is a UK employee benefit: you give up part of your gross pay in exchange for a car, which saves income tax and National Insurance, and you pay a small Benefit-in-Kind tax instead. It relies on HMRC rules and UK tax bands, so it only works with UK figures in pounds.

The car
P11D = list price incl. VAT, options and delivery (not the first-registration fee or VED). BIK is a percentage of this.
Overnight EV tariffs ≈ 7–9p; the standard capped rate is ≈ 26.5p.
Salary-sacrifice quote
The gross figure from your scheme quote (before tax savings). Pre-filled with a rough typical figure — use your real quote.
Agreement length
Car arrives in tax year
BIK steps up each April: 3% → 4% → 5% → 7% → 9%.
Included in the quote
Your employer saves 15% NI on what you sacrifice. Some pass part of it back by lowering the sacrifice. Leave at 0% if your quote already reflects it.
Your pay
Include regular bonus or overtime if you expect it — it changes which tax band the sacrifice comes from.
Income tax rates
Pension sacrifice you already make (it lowers your taxable pay first). Hours are used for the minimum-wage check.
Compare: personal lease (PCH)
Same car, term and mileage, inc VAT. Paid from take-home pay.
Compare: buying on PCP
Set from typical UK residual values for the model and term. Assumes you hand the car back at the end, like a lease.
If you paid for these yourself
Only the items your scheme includes are added to the lease and PCP figures, so all three are like for like. Items not included cost you the same whichever way you get the car.
Net cost per month
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Saving vs personal lease
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Effective discount
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vs paying from take-home pay
Total over the term
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Year 1 worked through

Monthly cost, three ways

Averaged over the whole agreement, including upfront payments. All figures come out of take-home pay.

Where each tax year's money goes

Above the line: what you give up and the BIK tax. Below: income tax and NI you save. Hover a bar — the total is your net cost.

Cumulative cost from take-home pay

Like for like: the car plus the services your scheme includes.

Tax year by tax year

Watch-outs for your numbers

Before you sign

    How this is calculated

    Salary sacrifice swaps part of your gross pay for the car, so the payment comes out before income tax and employee National Insurance. In return HMRC treats the car as a taxable benefit (BIK), which you pay income tax on — but not employee NI. For each tax year of the agreement:

    Worked example (the defaults): £60,000 salary in England, £600/mo sacrifice, £44,990 P11D at 4% BIK. Sacrifice £7,200/yr takes taxable pay from £60,000 to £52,800, all within the 40% band: income tax saved 40% × £7,200 = £2,880; NI saved 2% × £7,200 = £144. BIK benefit 4% × £44,990 ≈ £1,800, taxed at 40% = £720. Net = £7,200 − £2,880 − £144 + £720 = £4,896 a year (£408/mo).

    Tax bands used (approximate, 2026/27): England, Wales & Northern Ireland — personal allowance £12,570, basic rate 20% to £50,270, higher rate 40% to £125,140, additional rate 45% above. Scotland — 19% starter to ≈ £16,537, 20% basic to ≈ £29,526, 21% intermediate to £43,662, 42% higher to £75,000, 45% advanced to £125,140, 48% top above. The personal allowance shrinks by £1 for every £2 of adjusted net income over £100,000 (gone by £125,140) — and the BIK benefit counts towards that income. The same bands are applied to every year of the agreement; real thresholds can change each April.

    Comparisons. Personal lease total = initial rental + (term − 1) monthly rentals + admin fee. PCP total = deposit + monthly payments, where the monthly is the standard loan payment on (price − deposit) leaving the final payment (GMFV) outstanding, and you hand the car back at the end. Any item your scheme includes (insurance, servicing, tyres, breakdown, a home charger) is added to both alternatives at the cost you enter. Effective discount = 1 − salary-sacrifice total ÷ personal-lease total. Charging costs (miles × Wh/mi × 1.1 for losses × your rate) are the same whichever way you get the car, so they're shown for budgeting but don't change the comparison.

    Not tax or financial advice. Tax bands, NI rates, the BIK table and the minimum wage change each April, and your scheme's terms (what's included, early-termination cover, how pension and other benefits are calculated) are what really matter. Treat this as an estimate and check the details with your scheme provider, your payroll team or HMRC.

    Why does the cost go up each year?
    The BIK rate for electric cars is rising from 3% in 2025/26 to 9% by 2029/30. Your sacrifice stays the same, but the taxable benefit grows, so the tax you pay on it grows too. On a £45,000 car a higher-rate taxpayer pays about £540 a year in BIK tax at 3%, rising to about £1,620 a year at 9%.
    Is a home charger or the electricity taxable?
    A charger fitted at home as part of the scheme is generally treated as part of the car benefit rather than an extra benefit, and charging at a workplace charge point is tax-free. If your employer pays for your home electricity that's handled differently — ask your scheme provider how they treat it.
    What happens if I leave my job or go on parental leave?
    Most schemes include early-termination protection for things like redundancy, resignation, long-term sickness and maternity leave, sometimes with conditions (for example, cover only after the first few months). Without it, ending early typically costs a significant share of the remaining rentals. Read this part of the agreement carefully.
    Does salary sacrifice affect my pension or mortgage?
    It can. Your contractual salary goes down, so pension contributions calculated as a percentage of salary can fall unless your employer uses a "reference" pre-sacrifice salary. Mortgage lenders may look at the reduced figure, and earnings-related payments like Statutory Maternity Pay can be lower. Many employers have policies to protect these — check yours.