Your true net cost after income tax and NI savings. Pension, Cycle to Work, EV & more.
Saves income tax + NIEmployer NI saving included
Your Details
£
£
Cycle to Work Break-Even
£
Electric Vehicle Benefit
£
EV BIK rate 2025/26
Pure electric vehicles have a 3% BIK rate in 2025/26 (rising to 4% in 2026/27, then 5% in 2027/28). EV salary sacrifice schemes avoid this BIK tax — the car is taken gross, meaning full income tax and NI savings apply to the sacrifice amount.
£0
annual take-home saving
Monthly saving
£0
True cost of sacrifice
£0
Income Tax Saving
£0
NI Saving (Employee)
£0
Student Loan Saving
£0
Before vs After Salary Sacrifice
Without Sacrifice
With Sacrifice
Saving
Employer NI Saving (Class 1 Secondary — 15% of sacrifice)
Annual sacrifice amount£0
Employer NI saving (15%)£0
Passed on to you (100%)£0
Your total benefit£0
Your pension grows by more than your sacrifice
Your employer also saves 15% NI on your sacrifice amount (£0/year). Many employers pass this saving back into your pension — ask your HR team. With employer NI pass-through, your total pension boost becomes £0/year instead of just your sacrifice.
Cycle to Work break-even analysis
EV contract total benefit
How does salary sacrifice work in the UK?
Salary sacrifice is an arrangement where you give up part of your gross salary in exchange for a non-cash benefit — typically a pension contribution, cycle-to-work scheme, electric vehicle lease, or childcare vouchers. Because the sacrifice reduces your gross pay before income tax and National Insurance are calculated, you save tax and NI on the sacrificed amount.
For a basic-rate taxpayer (20% income tax + 8% NI), a £100/month salary sacrifice costs only £72/month net. For a higher-rate taxpayer (40% income tax + 2% NI above the UEL), a £100 sacrifice costs £58 net. Your employer also saves 15% NI (in 2025/26) on the sacrificed amount — some employers pass this saving on to you as an additional pension contribution.
From April 2025, the employer NI rate is 15% with a secondary threshold of £5,000 (down from £9,100). This makes salary sacrifice even more attractive as employer NI savings per employee are larger. For pension salary sacrifice, contributions also reduce your student loan repayments (if applicable) since repayments are based on your adjusted gross salary.
Related Guide
Is Salary Sacrifice Worth It?
Worked examples at £35k & £60k — exact tax and NI savings explained