Company Car Salary Sacrifice Calculator

You give up some gross salary for the car, so you don’t pay Income Tax or National Insurance on the amount sacrificed. Instead you pay Benefit-in-Kind tax on the car, which for an electric car is just 4% of its value. The gap between the tax and NI you save and the small BIK tax is the saving — which is why an electric car costs far less than the headline sacrifice.

Cars over 75 g/km fall under the “optional remuneration” (OpRA) rules, which tax you on the higher of the Benefit-in-Kind or the salary you gave up — wiping out most of the Income Tax saving. Electric cars (and anything 75 g/km or less) are exempt, so you only pay tax on their low 4% BIK while still saving tax and NI on the full sacrifice.

The real cost is how much your take-home pay actually falls — not the BIK tax on its own. For a higher-rate taxpayer, a £650/month electric sacrifice might reduce take-home by around £490–£500 a month once the tax and NI savings are taken off, plus the small BIK tax. This calculator shows your own figure.

Yes — usually in your favour. Sacrificing salary lowers your adjusted net income, which can reduce or remove the High Income Child Benefit Charge and restore Personal Allowance if you earn between £100,000 and £125,140. The Personal Allowance effect is already in the take-home figure here (it cuts your Income Tax). The Child Benefit charge saving is shown separately, because it is usually collected through your tax code or Self Assessment rather than this month’s payslip — so the calculator also shows your lower effective cost.

A few. Your pension, life cover, sick pay and maternity pay may be based on your lower, post-sacrifice salary depending on the scheme. Salary sacrifice can’t reduce your cash pay below the National Minimum Wage. And you’re usually committed for the lease term, including early-exit costs if you leave your job. Check the scheme terms before signing up.