CalculatorsSalary sacrifice car
Is a salary sacrifice car worth it?
Lease a car through your employer and it's paid for out of your salary before tax and National Insurance. You pay a small tax on the car instead. Three quick steps show what it really costs you, against leasing the same car yourself.
General information, not financial advice. A simplified model for employed income using 2026/27 income tax, National Insurance and student loan rates for England, Wales and Northern Ireland (Scottish income tax differs), with bands held at 2026/27 levels in later years. Company car tax: fully electric 4% (2026/27), 5% (2027/28), 7% (2028/29), 9% (2029/30); plug-in hybrids 4% to 16% by electric range in 2026/27, one point more in 2027/28, then 18% and 19% for all cars of 1 to 50g/km. Cars over 75g/km provided through salary sacrifice are taxed on the higher of the salary given up and the normal car benefit. The car's taxable value counts towards adjusted net income. Childcare support: England's 30 funded hours (38 weeks, valued at your nursery's rate) and Tax-Free Childcare (20% up to £2,000 a child); both stop if either parent's adjusted net income is over £100,000. Child Benefit: £27.05 a week for the first child, £17.90 for others, charged at 1% per £200 over £60,000. Speak to a regulated financial adviser before acting.
The worked example
Is a salary sacrifice car worth it? The tax maths, and when it doesn't add up
An electric car through work is paid for before tax and National Insurance, with only a small tax on the car itself. For many employees that makes it far cheaper than leasing the same car privately. Here's the working, who gains most, and where it backfires.