EV Salary Sacrifice Calculator UK 2025/26

EV salary sacrifice calculator UK 2025/26 — Tesla, Polestar, BMW, MG. BIK only 3% on electric cars. Save £2,000-£5,000/y

Quick answer: Electric vehicle salary sacrifice has just 3% Benefit-in-Kind (BIK) for 2025/26 — vs 25-35% for petrol/diesel. On a £600/month Tesla Model 3 lease, a higher-rate (40%) earner saves about £3,200/year vs personal lease.
Mustafa Bilgic
Reviewed by Mustafa Bilgic · UK Calculator Editor ·

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EV salary sacrifice is the single most lucrative tax-efficiency strategy for higher earners in 2025/26. The BIK rate for fully electric cars is only 3%, rising to 4% in 2026/27 and 5% in 2027/28 — still well below petrol/diesel BIK (25-37%). This calculator shows your exact saving on any EV lease.

How ev salary sacrifice calculator works in 2025/26

How EV salary sacrifice works:

  1. Employer leases EV through scheme provider (Octopus EV, Tusker, ElectriX, etc.)
  2. Lease cost deducted from your gross salary (saves income tax + NI)
  3. You pay BIK on 3% of car's P11D value (list price + options)
  4. Net cost = lease - tax saving + BIK tax

BIK rate timeline (electric only):

Tax yearEV BIKPetrol/diesel BIK
2024/252%25-37%
2025/263%25-37%
2026/274%26-37%
2027/285%27-37%

Hybrid (≥130-mile electric range, ≤50g CO2) BIK 5% 2025/26 — also attractive but EVs win.

Worked example: Tesla Model 3 (£42k P11D) higher-rate earner, £550/month lease

Annual sacrifice £6,600. Saves £2,640 income tax (40%) + £132 NI (2%) = £2,772 tax saving. BIK 3% × £42,000 × 40% = £504 BIK tax. Net saving £2,268/year vs personal £6,600 lease.

Gross: £80,000 → Take-home: £56,000.00/year (£4,666.67/month)

Worked example: Polestar 2 (£50k P11D) basic-rate earner, £600/month lease

Annual sacrifice £7,200. Saves £1,440 income tax (20%) + £576 NI (8%) = £2,016. BIK 3% × £50,000 × 20% = £300 BIK tax. Net saving £1,716/year. Covers about 30% of the lease cost from tax savings alone.

Gross: £45,000 → Take-home: £36,000.00/year (£3,000.00/month)

Worked example: MG4 (£28k P11D) basic-rate earner, £350/month lease

Annual sacrifice £4,200. Saves £840 IT + £336 NI = £1,176. BIK 3% × £28,000 × 20% = £168. Net saving £1,008/year. Real cost of MG4 reduced from £350/month to £266/month.

Gross: £32,000 → Take-home: £25,600.00/year (£2,133.33/month)

Frequently asked questions

Why is EV BIK only 3% in 2025/26?
To incentivise electric vehicle adoption, the UK government set very low company car BIK rates for EVs starting 0% in 2020/21. Rates rise gradually: 1% (2021/22), 2% (2022-23 to 2024-25), 3% (2025/26), 4% (2026/27), 5% (2027/28). Still wildly favourable vs petrol.
Does EV salary sacrifice include the lease, insurance, MOT?
Yes — almost all EV sal sac providers offer fully maintained leases including comprehensive insurance, breakdown cover, MOT, servicing, and tyres. You pay one monthly figure that covers everything. You add fuel/charging.
Can I charge the EV at home and claim back electricity?
Yes — HMRC allows employers to reimburse home charging at the Advisory Electricity Rate (AER), currently 7p/mile (Apr 2025). Some employers fund a dedicated home charger as a tax-free benefit (charge points are excluded from BIK).
What happens if I leave my employer mid-lease?
Most schemes have an "early termination" charge or insurance product that covers redundancy and some resignation scenarios. Read the contract carefully. Some providers have a "no early termination fee for redundancy" clause.
Can I get an EV salary sacrifice if I'm a director?
Yes — directors of Ltd Cos can run EVs through their company. Capital allowances on EVs are 100% first-year relief — saves corporation tax in year of purchase. Combined with 3% BIK, this is highly tax-efficient.
Does salary sacrifice EV affect my mortgage?
Reduces your gross salary for mortgage assessment. £80k - £6.6k EV = £73.4k. Some mainstream lenders ignore salary sacrifice; specialist lenders (Halifax, Coventry BS) gross-up. Plan EV scheme around mortgage applications.
What's the catch with EV salary sacrifice?
Three things: (1) BIK rates rise yearly — by 2027/28 it's 5%, still good but less; (2) early termination can be expensive if you change jobs; (3) lease ends after 3-4 years, you don't own the car. Best for committed EV adopters with stable employment.

Official UK Sources

Last reviewed: May 2026 against HMRC 2025/26 rates.

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