Car Finance Comparison
Is a Salary Sacrifice Car Worth It? UK Calculator
EV BIK Rate
4%
Petrol BIK
Varies
For 2026/27, fully electric cars have a 4% BIK rate. On a £40,000 car that is a £1,600 annual taxable benefit before applying your income-tax rate. Hybrid and petrol rates depend on the vehicle: enter its HMRC percentage. For cars over 75g CO₂/km under salary sacrifice, the taxable benefit is normally the higher of salary given up and the normal car benefit.
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Salary Sacrifice Quote
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Salary sacrifice is cheapest
Saves £0 over 3 years
Salary Sacrifice
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Cash Purchase
How the salary sacrifice car calculator works
The calculator compares three ways to get your next car. Salary sacrifice deducts the lease cost from your gross pay before tax and NI, saving you 20-45% income tax and 2-8% NI on the amount sacrificed. You pay a small Benefit in Kind (BIK) tax on the car's list price — 4% for EVs, with vehicle-specific rates for hybrids and petrol cars. The result depends on your salary, vehicle and lease terms.
PCP finance is paid from your net (post-tax) salary. You put down a deposit, make monthly payments, then either pay the balloon to own the car, hand it back, or trade it in. Cash purchase uses post-tax money upfront, and the true cost is the depreciation over the ownership period.
For 2026/27, fully electric cars have a 4% BIK rate. On a £40,000 car that is a £1,600 annual taxable benefit before applying your income-tax rate. Hybrid and petrol rates depend on the vehicle: enter its HMRC percentage. For cars over 75g CO₂/km under salary sacrifice, the taxable benefit is normally the higher of salary given up and the normal car benefit.
Frequently asked questions
Is salary sacrifice worth it for a car?
For 2026/27, fully electric cars have a 4% BIK rate. On a £40,000 car that is a £1,600 annual taxable benefit before applying your income-tax rate. Hybrid and petrol rates depend on the vehicle: enter its HMRC percentage. For cars over 75g CO₂/km under salary sacrifice, the taxable benefit is normally the higher of salary given up and the normal car benefit.
What is the BIK rate for electric cars in 2026/27?
The BIK rate for fully electric vehicles is 4% of list price. On a £40,000 EV, that's £1,600 BIK value per year — costing a basic rate taxpayer £320/year in extra tax.
How does salary sacrifice car leasing work?
Your employer leases a car and deducts the cost from your gross salary before tax and NI. This reduces your taxable pay, saving income tax and NI on the sacrifice amount. The lease typically includes insurance, maintenance, road tax and breakdown cover.
Compare like-for-like costs: PCP totals shown include the final ownership payment. The comparison subtracts the same estimated resale value from PCP payments and cash purchase price. Lease inclusions can differ. The tax estimate holds current-year rules constant over the chosen term; future BIK rates may rise. Salary sacrifice must not reduce cash pay below minimum wage. Confirm the vehicle BIK percentage with HMRC.