Salary Sacrifice Savings Calculator

Salary sacrifice pays for a car from your pay before income tax and National Insurance, but you then pay tax on the car's benefit. Enter your salary, the monthly sacrifice and the car to compare the cost with a personal lease paid from take-home pay.

Uses 2026/27 tax rates (6 April 2026 to 5 April 2027). Results are estimates; your payslip may differ. See what is included

Your Details

You

£
Where do you pay income tax?

Scotland has its own income tax bands. Wales and Northern Ireland use the same rates as England in 2026/27.

The scheme

£/mo

The gross amount taken from your salary each month.

£/mo

Left blank, the same monthly amount is used.

The car

£

The list price including VAT, delivery and options, before any discount.

Type of car

Your Savings

Salary sacrifice compared with paying a personal lease from take-home pay, using 2026/27 income tax and employee National Insurance.

Enter your details and press Calculate.

How the saving is calculated

Your income tax and National Insurance for 2026/27 are worked out before and after the sacrifice, so the result allows for the bands you cross.

  1. Salary given up
    Monthly sacrifice × 12.

  2. Tax and National Insurance saved
    Income tax and employee National Insurance on your full salary, minus the same on your reduced salary. National Insurance is 8% between £1,048 and £4,189 a month and 2% above, so the saving is smaller for higher earners.

  3. Tax on the car
    Income tax on the car benefit (list price × the HMRC percentage). For cars above 75 g/km the taxable amount is the salary given up if that is higher.

  4. Net cost and saving
    Net cost = salary given up − tax and NI saved + tax on the car. Saving = the personal lease you would otherwise pay from take-home pay − net cost.

Worked example

An employee in England earning £60,000 gives up £500 a month (£6,000 a year) for a fully electric car with a £40,000 list price, compared with a £500-a-month personal lease.

Net cost of salary sacrifice
£4,120
Personal lease
£6,000
Estimated annual saving
£1,880

Income tax saved £2,400 (40% on £6,000). National Insurance saved £120 (2% above £4,189 a month). Tax on the car: £40,000 × 4% = £1,600 benefit × 40% = £640. Net cost £6,000 − £2,400 − £120 + £640 = £4,120. Saving £6,000 − £4,120 = £1,880.

Assumptions and limits

  • Tax year 2026/27 only, with your salary as your only income, paid in equal monthly amounts, the standard Personal Allowance and employee National Insurance category A.
  • The car benefit uses HMRC's 2026/27 percentages. Cars above 75 g/km are taxed on the higher of the car benefit and the salary given up; cars at or below 75 g/km on the car benefit.
  • Pension contributions, student loan repayments, the High Income Child Benefit Charge, salary-linked benefits and borrowing limits are not included. A scheme cannot take your pay below the National Minimum Wage.
  • If you leave the personal lease blank, it is assumed to cost the same each month as the salary sacrifice.

Key Takeaways

  • Salary sacrifice saves income tax and National Insurance on the amount you give up, but you pay income tax on the car's benefit.
  • Higher-rate taxpayers save more income tax, but only 2% National Insurance on pay above £4,189 a month.
  • Low-emission cars (75 g/km or less) keep the main advantage; above that you are taxed on at least the salary given up.

Sources

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