EV salary sacrifice calculator
What an electric car on salary sacrifice actually saves a UK driver, computed from HMRC income tax, National Insurance and benefit-in-kind rates. Free to use.
Checked against the official source on 28 August 2026
Salary sacrifice on an electric car saves a UK basic-rate taxpayer 28% of the amount sacrificed and a higher-rate taxpayer 42%, being income tax plus employee National Insurance at the marginal rate. The driver then pays benefit-in-kind on the car at 4% of its P11D value for 2026/27 (THRIVE, from HMRC).
Cite this
THRIVE EV salary sacrifice saving by tax band, 2026/27. thrivefleet.co.uk/data/salary-sacrifice (accessed 28 August 2026).
| Take-home pay falls by | £290.00 |
|---|---|
| Tax and NI you stop paying | £210.00 |
| Benefit-in-kind tax you start paying | £53.33 |
| Net monthly cost | £343.33 |
What the quote does not show you
Benefit-in-kind on an electric car rises every April, so the figure a scheme quotes is the cheapest month of the contract. Over a three-year term this one starts at £343.33 and ends at £383.33, averaging £361.11 a month.
| Tax year | BiK rate | Cost a month |
|---|---|---|
| 2026/27 | 4% | £343.33 |
| 2027/28 | 5% | £356.67 |
| 2028/29 | 7% | £383.33 |
| Whole term (36 months) | average | £361.11 (£13,000 in total) |
And the fuel you stop buying
HMRC values petrol in a 1401cc to 2000cc car at 17p a mile and home-charged electricity at 7p. At 10,000 miles a year that is £83.33 a month you stop spending, which is the part that decides whether the arrangement is worth it.
Illustrative, not advice, and not a quote. Uses 2026/27 rates: 40% income tax, 2% employee National Insurance and 4% benefit-in-kind on an electric car. England, Wales and Northern Ireland; Scottish income tax bands differ. It assumes the sacrifice does not take you below the National Minimum Wage or into a different band, and ignores any employer administration charge.
What the benefit-in-kind costs on popular electric cars, 2026/27
The monthly income tax on the car's benefit-in-kind for a basic-rate (20%), higher-rate (40%) and additional-rate (45%) taxpayer, and the employer's Class 1A National Insurance on the same benefit. This is the tax side of a salary sacrifice scheme; the scheme's own monthly rental depends on the provider and is not included.
| Car (entry version) | P11D price | Benefit a year | 20% taxpayer, a month | 40% taxpayer, a month | 45% taxpayer, a month | Employer NI a year |
|---|---|---|---|---|---|---|
| Tesla Model YRear-Wheel Drive | £44,925 | £1,797 | £29.95 | £59.90 | £67.39 | £270 |
| Tesla Model 3Rear-Wheel Drive | £37,925 | £1,517 | £25.28 | £50.57 | £56.89 | £228 |
| Polestar 2Standard range Single motor | £45,145 | £1,806 | £30.10 | £60.19 | £67.72 | £271 |
| Polestar 4SUV Rear motor | £54,685 | £2,187 | £36.46 | £72.91 | £82.03 | £328 |
| Kia EV3Air SR 58.3kWh | £32,990 | £1,320 | £21.99 | £43.99 | £49.48 | £198 |
| Volkswagen ID.4Match Pure | £39,525 | £1,581 | £26.35 | £52.70 | £59.29 | £237 |
| BMW i4eDrive35 Sport | £51,370 | £2,055 | £34.25 | £68.49 | £77.06 | £308 |
| Skoda ElroqSE L 60 | £34,230 | £1,369 | £22.82 | £45.64 | £51.35 | £205 |
| Volkswagen ID.7Pro Match Plus 77kWh | £51,465 | £2,059 | £34.31 | £68.62 | £77.20 | £309 |
| BYD SealDesign RWD | £45,665 | £1,827 | £30.44 | £60.89 | £68.50 | £274 |
| Volvo EX30Core P5 | £32,995 | £1,320 | £22.00 | £43.99 | £49.49 | £198 |
| Hyundai Ioniq 5Advance 63kWh | £40,630 | £1,625 | £27.09 | £54.17 | £60.95 | £244 |
| Skoda EnyaqSE L 60 | £39,905 | £1,596 | £26.60 | £53.21 | £59.86 | £239 |
How the figures are worked out
Taking the Tesla Model Y: its P11D price of £44,925 times the 4% appropriate percentage for an electric car in 2026/27 gives a taxable benefit of £1,797 a year. A 40% taxpayer pays 40% of that, £718.80 a year or £59.90 a month. The employer pays Class 1A National Insurance on the same benefit, £270 a year. Rates from HMRC's appropriate percentages, income tax rates and employer rates and thresholds.
What changes next April
From 6 April 2027 the appropriate percentage for an electric car rises from 4% to 5%, already legislated. On the same prices that takes the Tesla Model Y's benefit-in-kind tax for a 40% taxpayer from £59.90 to £74.88 a month. The full timeline is on the company car tax page.
Prices: Tesla UK configurator, 23 Oct 2026 (£44,990 on the road, less the £55 first registration fee and £10 VED it includes); Tesla UK configurator, 23 Oct 2026 (£37,990 on the road, less the £55 first registration fee and £10 VED it includes); Polestar UK configurator, 23 Oct 2026 (£45,210 list price on the road, less the £55 first registration fee and £10 VED it includes; before the time-limited £5,000 offer); Polestar UK configurator, 23 Oct 2026 (£54,750 list price on the road, less the £55 first registration fee and £10 VED it includes; before the time-limited £4,000 offer); Kia UK EV3 pricing, P11D column, 23 Oct 2026; Volkswagen UK ID.4 page, 23 Oct 2026 (the "from £39,590" on Volkswagen UK's ID.4 page, on the road, less the £55 first registration fee and £10 VED; current versions are offered from stock only); BMW UK configurator, 23 Oct 2026 (the price shown including VAT, used as shown); Skoda UK Elroq price list, 28 Oct 2026 (£34,295 recommended on the road, which Skoda says includes the first registration fee and first year's VED, less those £65; before the Electric Car Grant); Volkswagen UK configurator, 28 Oct 2026 (the P11D figure Volkswagen UK's configurator shows (£51,530 on the road)); BYD UK configurator, 28 Oct 2026 (£45,730 on the road, which BYD says includes the first registration fee and first year VED, less those £65); Volvo EX30 price list, Model Year 2027 Edition 2 (P11D column), read 28 Oct 2026 (the P11D value column of Volvo's price list; before the £2,000 saving its website shows); Hyundai Ioniq 5 price and specification guide, pricing effective 1 October 2026 (P11D column); Skoda UK price list, effective 1 October 2026 (P11D column).
Saving per £1 sacrificed
Income tax plus employee NI
| Category | Value (%) |
|---|---|
| Basic | 28% |
| Higher | 42% |
| Additional | 47% |
A salary sacrifice comes out of gross pay, so the driver never pays income tax or employee National Insurance on the sacrificed amount. That is where the saving comes from, and it is why the figure differs by band rather than being one headline percentage.
The counter-intuitive part is National Insurance. It does not rise with income: it falls to 2% above the upper earnings limit. So a higher-rate taxpayer saves 40% tax plus 2% NI, which is 42% and not 48%. A basic-rate taxpayer saves less income tax but more NI, at 28% in total. An additional-rate taxpayer saves 47%.
Against that, the car is a taxable benefit. The driver pays benefit-in-kind at 4% of the car's P11D value for 2026/27, at their marginal income tax rate, which is what keeps an electric car worth sacrificing for and a petrol one usually not. The full timeline to 2029/30 is on the company car tax page.
This is arithmetic on published rates, not advice, and it is deliberately not a lease quote: the monthly figure depends on the vehicle, term, mileage and the provider's rates, none of which THRIVE holds from a primary source. For what that comes to on real cars, we have covered the Tesla Model Y on salary sacrifice, the Polestar 4 salary sacrifice cost and the Škoda Elroq against the Enyaq.
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| Band | Income tax | Employee NI | Saved per £1 |
|---|---|---|---|
| Basic rate | 20% | 8% | 28% |
| Higher rate | 40% | 2% | 42% |
| Additional rate | 45% | 2% | 47% |
Saving per £1 sacrificed = marginal income tax rate + marginal employee National Insurance rate. Basic rate uses the 8% main NI rate, since that band sits below the monthly upper earnings limit; higher and additional rate use the 2% rate above it.
Rates for 2026/27 from GOV.UK income tax rates, National Insurance rates and category letters (Class 1, category A) and HMRC's appropriate percentages, under the Open Government Licence v3.0. All read live from the rates API.
England, Wales and Northern Ireland only. Scottish income tax bands differ, so a Scottish taxpayer's saving is not the figure above. Employers also pay Class 1A National Insurance on the benefit at 15%, which sits on the employer's side of the arrangement rather than the driver's.
Figures checked against GOV.UK on 28 August 2026.
Free JSON API - no key, open CORS, cache-friendly:
curl https://www.thrivefleet.co.uk/api/v1/rates{ "rates": [ { "key": "income_tax_higher_pct", "value": 40, … } ] }Free to use. Please credit THRIVE and link to the page a figure came from: a request, never a condition of use. See the data terms and the API guide.
How much does salary sacrifice save on an electric car?
28% of the amount sacrificed at the basic rate and 42% at the higher rate, being income tax plus employee National Insurance. The driver then pays benefit-in-kind at 4% of P11D value for 2026/27.
Why does a higher-rate taxpayer save 42% and not 48%?
Employee National Insurance falls to 2% above the upper earnings limit rather than rising. So the higher-rate saving is 40% income tax plus 2% NI.
Is salary sacrifice still worth it for a petrol car?
Usually not. The saving is the same percentage of the sacrificed pay, but the benefit-in-kind charge on a petrol car is far higher than the 4% on an electric one, which normally cancels it out. See the company car tax rates.
Company car tax and salary sacrifice: the guide