Company Car Salary Sacrifice Calculator
Estimate the financial impact of opting for a company car via a salary sacrifice scheme. Enter your details and car information below.
How This Works
A company car salary sacrifice scheme allows you to exchange a portion of your gross salary for a company car. This can lead to savings on Income Tax and National Insurance contributions (NICs).
- Your gross salary is reduced by the sacrificed amount.
- You pay Benefit-in-Kind (BIK) tax on the value of the car.
- Employee NICs are calculated on your reduced salary.
- Employer also saves on their NICs.
The calculator considers Optional Remuneration Arrangements (OpRA) rules, where the taxable amount for income tax is generally the higher of the salary sacrificed or the car's BIK value. However, for pure electric cars (0g/km CO2), the BIK value is used even if it's lower.
This tool provides an estimate for illustrative purposes only. Tax rules are complex and subject to change. Always consult with a qualified financial advisor or accountant for personalized advice.
Frequently Asked Questions
- What is the Company Car Salary Sacrifice Calculator?
- The Company Car Salary Sacrifice Calculator is a free online tool designed to help UK employees and employers understand the financial implications of using a salary sacrifice scheme to drive an electric or low-emission company car. It shows the impact on take-home pay, tax savings, and National Insurance contributions.
- How do I use the Company Car Salary Sacrifice Calculator?
- Simply enter your annual salary, select the car’s list price, CO₂ emissions, and estimated monthly lease cost. The calculator will show how the salary sacrifice affects your monthly take-home pay and what tax and NI savings you might benefit from.
- Who can use a salary sacrifice scheme for a company car?
- Generally, UK employees who earn above the National Minimum Wage after the salary sacrifice can participate in the scheme. Employers must also offer it. The calculator helps you determine if the arrangement is financially beneficial in your case.
- Does the calculator include current Benefit-in-Kind (BiK) rates?
- Yes, the calculator uses the latest UK Benefit-in-Kind (BiK) tax rates for electric and low-emission vehicles. These rates are updated annually by HMRC and are key to calculating the tax owed on the car benefit received.
- Is the salary sacrifice scheme only for electric vehicles?
- While salary sacrifice can technically apply to many types of cars, the most significant savings—and the lowest BiK rates—are for electric or ultra-low emission vehicles (ULEVs). This calculator is focused on those vehicles to reflect common real-world schemes.
- What should I consider beyond the calculator results?
- The calculator provides a financial estimate, but you should also consider how a salary sacrifice could affect your pension contributions, student loan repayments, statutory pay entitlements, and future borrowing (like mortgage applications). Consult a financial adviser for full guidance.
