EV Salary Sacrifice Calculator 2026/27

Salary sacrifice for an electric vehicle works by reducing your gross salary in exchange for the car, which lowers the salary you pay Income Tax and National Insurance on. Because fully electric cars currently attract a very low Benefit-in-Kind (BIK) rate of just 4% for 2026/27 (rising gradually to 5% in 2027/28 and further in future years), the tax charged on receiving the car as a benefit is much smaller than the tax and NI you save by sacrificing salary — making EV salary sacrifice one of the most tax-efficient ways to get a new car in the UK right now.

Worked example: a basic-rate taxpayer sacrificing £500/month of gross salary for an EV lease saves 20% Income Tax and 8% NI on that amount (£140/month in combined tax and NI), while paying BIK tax on only 4% of the car's list price — for a £35,000 EV, that's roughly £1,400 of taxable benefit per year, taxed at their marginal rate (around £280/year for a basic-rate taxpayer, or about £23/month). The net effect is a significantly cheaper way to access a new EV compared with paying for the same lease from taxed income.

Higher and additional-rate taxpayers see even bigger proportional savings, since they save 40% or 45% Income Tax plus 2% NI on the sacrificed amount, while the BIK tax charge stays relatively low due to the 4% rate. This makes EV salary sacrifice particularly attractive for higher earners, though it's worth checking how sacrificing salary affects other things tied to your gross pay, like pension contributions calculated as a percentage of salary, mortgage affordability assessments, and student loan repayment thresholds.