2026/27 calculator
Electric car salary sacrifice calculator
An electric car through salary sacrifice is paid for from your gross salary, so the lease cost escapes income tax, National Insurance and student loan. You then pay tax on a benefit in kind of just 4% of the car's list price in 2026/27, which for most drivers is small next to the saving.
Enter the monthly sacrifice and list price from your scheme's quote to see the real cost after tax, and how it compares with paying for the same car on a personal lease.
Take-home pay
£3,201.13a month
£38,414 a year
- Income tax
- £8,912
- National Insurance
- £3,078
- Effective rate
- 20%
- Marginal rate
- 41%
- Into your pension
- £400/mo
- Car costs you after tax
- £379/mo
A £45,000 electric car at £550 a month, with and without the car
| Scenario | Take-home a year | Net income, all sources | Car benefit (taxable) | Income tax | National Insurance |
|---|---|---|---|---|---|
| £35,000 salary, no car | £28,722 | £28,722 | £0 | £4,486 | £1,794 |
| £35,000 salary with the EV | £23,610 | £23,610 | £1,800 | £3,526 | £1,266 |
| £60,000 salary, no car | £45,362 | £45,362 | £0 | £11,432 | £3,210 |
| £60,000 salary with the EV | £40,814 | £40,814 | £1,800 | £9,512 | £3,078 |
| £110,000 salary, no car | £72,362 | £72,362 | £0 | £33,432 | £4,210 |
| £110,000 salary with the EV | £68,774 | £68,774 | £1,800 | £30,552 | £4,078 |
Compare each pair: the drop in net income is what the car really costs you over a year, after the benefit in kind tax.
How the saving works
Your gross pay drops by the monthly amount the scheme quotes, which usually covers the lease, insurance, servicing and tyres. You save income tax and NI at your top rate on that amount. Against that, the car is a taxable benefit: its list price (the P11D value) multiplied by the appropriate percentage is added to your taxable income, and you pay income tax on it. Your employer pays 15% Class 1A National Insurance on the benefit.
For a £45,000 electric car in 2026/27, the benefit is £1,800 a year at 4%. A basic rate taxpayer pays £360 a year in benefit in kind tax, and a higher rate taxpayer £720.
Company car tax rates to 2029/30
| Car | 2025/26 | 2026/27 | 2027/28 | 2028/29 | 2029/30 |
|---|---|---|---|---|---|
| Fully electric | 3% | 4% | 5% | 7% | 9% |
| Plug-in hybrid, 130+ miles range | 3% | 4% | 5% | 18% | 19% |
| Plug-in hybrid, 70 to 129 miles | 6% | 7% | 8% | 18% | 19% |
| Plug-in hybrid, 40 to 69 miles | 9% | 10% | 11% | 18% | 19% |
| Plug-in hybrid, 30 to 39 miles | 13% | 14% | 15% | 18% | 19% |
| Plug-in hybrid, under 30 miles | 15% | 16% | 17% | 18% | 19% |
Rates are set years ahead, so check the rate for every year of your lease. Most schemes run for two to four years, and the jump for plug-in hybrids in 2028/29 is large.
Petrol, diesel and the optional remuneration rules
Cars emitting more than 75g/km of CO2 fall under the optional remuneration arrangement (OpRA) rules. You are taxed on whichever is higher: the normal benefit in kind or the salary you gave up. In practice that wipes out the tax saving, which is why almost every salary sacrifice car scheme is electric. Diesels that do not meet the RDE2 standard also carry a 4% supplement, up to the 37% maximum.
Plug-in hybrids and the 2025 easement
Newer plug-in hybrids built to the Euro 6e-bis standard often report higher CO2 figures than older models. A Budget 2025 easement treats those first registered from 1 January 2025 with CO2 of 51g/km or more as 1g/km until 5 April 2028, so their electric range sets the rate. Cars made available before then keep the easement until 5 April 2031. Switch on the 2025 registration option in the calculator if this applies to your car.
What else to check
Look at early termination fees if you leave your job, how the scheme treats maternity and long-term sick leave, and how a lower salary affects mortgage applications. An electric vehicle mileage charge is planned to start in April 2028 at 3p a mile for electric cars, which will add to running costs for high-mileage drivers. Charging at work is tax-free, and many schemes include a home charger.
Common questions
How much tax do you pay on an electric company car in 2026/27?
The benefit in kind rate for a fully electric car is 4% of the list price in 2026/27. On a £40,000 car that is a £1,600 taxable benefit, costing £320 a year for a basic rate taxpayer and £640 for a higher rate taxpayer.
Is EV salary sacrifice worth it?
For most employees it is, because the lease is paid from gross pay at a saving of 28% to 62% depending on your tax band, while the benefit in kind is only 4% of the list price. The saving is largest for higher rate taxpayers and anyone earning between £100,000 and £125,140.
What will EV company car tax be from 2027/28?
The rate for fully electric cars rises to 5% in 2027/28, 7% in 2028/29 and 9% in 2029/30.
Do petrol and diesel cars work on salary sacrifice?
Rarely. Cars above 75g/km of CO2 fall under the optional remuneration rules, so you are taxed on the higher of the benefit in kind and the salary you sacrificed, which removes most of the saving.
Does EV salary sacrifice affect my pension or mortgage?
It lowers your contractual salary, which can reduce pension contributions worked out as a percentage of pay and the salary a mortgage lender sees. Many employers base pension contributions on your pre-sacrifice salary, so ask yours.
Can EV salary sacrifice get me under £100,000?
Yes. The sacrificed amount reduces your adjusted net income, although the benefit in kind is added back as taxable income, so the net reduction is the sacrifice minus the benefit.
Official sources
Every rate and threshold on this page is checked against these official pages. How we calculate
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