Salary Sacrifice Car Calculator
Salary sacrifice schemes are usually pitched on the gross monthly figure — but that's not what leaves your bank account. This works out the real reduction in your take-home pay, once income tax, National Insurance and Benefit-in-Kind tax are all accounted for.
Your details
How the saving breaks down (annual)
Estimates only, using 2026/27 tax rules for England, Wales or Northern Ireland. This is not personalised tax advice — your actual saving depends on your employer's scheme rules, pension contributions, student loan deductions and any other salary-linked benefits, none of which are modelled here. Confirm the exact figures with your employer or a tax adviser before deciding.
What this result means
Your effective monthly car cost is the true drop in your take-home pay — the gross salary you give up, less the income tax and employee National Insurance you no longer pay on it, plus the Benefit-in-Kind tax the car itself adds. It is usually meaningfully lower than the gross sacrifice figure your employer's scheme quotes, because that gross figure is pre-tax.
Methodology
Tax and National Insurance are calculated using published 2026/27 UK rates — Income Tax bands (separately for Scotland, which sets its own rates, and the rest of the UK), the Personal Allowance taper above £100,000, and employee/employer Class 1 National Insurance thresholds. All figures live in one place in our codebase and are reviewed as rates change — see the methodology page for the general approach used across every calculator. Benefit-in-Kind tax is calculated on the car's taxable list price (after any upfront capital contribution, capped at £5,000 relief per HMRC rules) at the rate you enter, applied at your marginal tax rate.
This is a planning estimate, not personalised tax advice. It does not model pension salary-sacrifice interactions, student loan repayment thresholds, or scheme-specific rules your employer may apply — confirm exact figures with your employer or a qualified adviser before deciding.
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Guides
Frequently asked questions
What is a salary sacrifice car scheme?
Your employer leases a car and you give up part of your gross salary (before tax and National Insurance) to cover it. Because the sacrifice comes out of gross pay, you save income tax and employee National Insurance on that amount — but you also pay Benefit-in-Kind (BIK) tax on the car as a taxable perk, which offsets some of the saving.
Why isn't the gross sacrifice amount my real cost?
The monthly figure your employer quotes is what comes off your gross salary, not what you actually lose in take-home pay. Because that amount is untaxed, your payslip's tax and NI deductions fall too — so the drop in your net pay is smaller than the gross sacrifice, minus whatever BIK tax you now owe on the car.
How is the Benefit-in-Kind (BIK) rate decided?
BIK is set by HMRC based on the car's CO2 emissions and, for electric or plug-in hybrid cars, its electric range — fully electric cars currently sit at the lowest rates. Check your specific vehicle's rate using GOV.UK's company car tax checker and enter it directly; we don't estimate it from CO2 figures.
Does this affect my pension or student loan repayments?
Potentially, yes. Reducing your gross salary can reduce salary-linked pension contributions (if calculated as a percentage of gross pay) and student loan repayments (which are based on income above a threshold). This calculator doesn't model either — check with your employer's scheme documentation.
Last reviewed: 30 August 2026. Figures and methodology are reviewed as UK rates and rules change.