Salary Sacrifice Car Calculator
This salary sacrifice car calculator estimates the net monthly cost of a company car taken through salary sacrifice. It accounts for the income tax and National Insurance you save on the sacrificed salary, and for the benefit-in-kind tax on the car, which depends on its list price and CO2 emissions. Electric cars usually have a much lower benefit-in-kind percentage than petrol or diesel cars.
Calculator
Results are estimates where a disclaimer applies.
How to use this salary sacrifice car calculator
- Enter the monthly gross salary sacrifice amount for the car.
- Enter your income tax rate (20% or 40% are the common UK rates) and your National Insurance rate.
- Enter the car's list price (P11D value) and its benefit-in-kind percentage.
- Click Calculate to see the tax and National Insurance saved, the benefit-in-kind tax and the net monthly cost.
Worked example: a £400 monthly sacrifice at 20% tax and 8% National Insurance saves £80 tax and £32 National Insurance. With a £35,000 list price at 3% benefit-in-kind, annual benefit-in-kind is £1,050, tax at 20% is £210 per year or £17.50 per month, so the net monthly cost is £400 − £80 − £32 + £17.50 = £305.50.
Frequently Asked Questions
How does salary sacrifice for a car work?
You give up part of your gross salary in exchange for a leased car. Because the sacrificed salary is not taxed, you save income tax and National Insurance, but you pay benefit-in-kind tax on the car.
Why are electric cars cheaper through salary sacrifice?
Electric cars have a low benefit-in-kind percentage, so the benefit-in-kind tax is much smaller than for a petrol or diesel car with the same list price.
Does salary sacrifice affect my pension or mortgage?
It can, because your gross salary falls. Some pension schemes use the pre-sacrifice salary, but mortgage lenders may look at the lower figure. Check with your employer and lender.
Is the figure from this calculator exact?
No. It is an estimate. Your employer's scheme terms, your tax code and the exact benefit-in-kind rules for the year all affect the final cost.