BIK and salary sacrifice in 2026/27: the honest maths
For a 40% taxpayer, salary sacrifice on a new EV often comes out cheaper than buying a used one outright. The Benefit-in-Kind rate is the lever; here's exactly how it works in 2026/27 and what changes in 2027/28.
Salary sacrifice on an EV is one of the few remaining genuinely tax-efficient employee benefits. Whether it's right for you depends on three numbers: your tax bracket, the car's P11D value, and the Benefit-in-Kind (BiK) rate for the tax year you're driving it in.
The 2026/27 picture
For a fully electric car, the BiK rate is:
| Tax year | BiK rate |
|---|---|
| 2026/27 | 4% |
| 2027/28 | 5% |
| 2028/29 | 7% |
| 2029/30 | 9% |
That's the percentage of the car's list price (P11D value) that gets added to your taxable income each year as a notional benefit. The tax you pay on the benefit is then your usual marginal rate (20%, 40% or 45%).
A worked example
A new Skoda Enyaq 85 with a P11D value of £44,500, leased through a salary-sacrifice scheme for £740 a month gross.
You are a 40% taxpayer.
What it actually costs you per month
- Gross monthly cost: £740 (this is what is taken from your gross pay before tax)
- Income tax saving: £740 × 40% = £296 saved
- Employee NI saving: £740 × 2% = £14.80 saved
- Plus the BiK charge: P11D × BiK rate × marginal rate divided by 12: £44,500 × 4% × 40% / 12 = £59.33 added back
- Net monthly cost: £740 − £296 − £14.80 + £59.33 ≈ £488
That's the figure to compare against owning a used equivalent. For a 2023 used Enyaq 80 at £25,500 financed on a typical 4 to 5 year HP loan, total monthly cost (loan + insurance + servicing + tyres) typically lands £450 to £540 depending on your deposit.
The two options usually end up within £30 to £50 a month of each other, with salary sacrifice giving you a brand-new car under full warranty and a guaranteed handback, versus a used car you own outright at the end.
The 2027 onwards picture
The BiK rate rises 1 to 2 percentage points each year. In our example above, the BiK charge rises from £59 a month in 2026/27 to £104 a month in 2028/29.
That's the trajectory worth knowing. Salary sacrifice on an EV is at its most generous right now and gets a little less generous every April. It's still substantially cheaper than equivalent petrol or diesel salary sacrifice (where BiK rates are 25 to 37%) but the gap is narrowing.
If you're choosing between a 36-month and 48-month sal-sac term, the 36 captures more of the cheap-BiK years and is generally the better-value choice.
When salary sacrifice isn't worth it
- You're a 20% taxpayer. The Income Tax saving is half what a 40% taxpayer gets, and the BiK charge weighs more heavily proportionally. Most 20% taxpayers do better buying used outright.
- You're not certain you'll stay with the same employer for the term. Early termination charges on sal-sac leases can be punitive; many schemes wrap them into the gross monthly cost, but some don't.
- Your scheme charges an admin fee. Some employer schemes add 1 to 4% to the gross monthly cost. That can erase 30 to 50% of the saving.
- You're over the £40,000 threshold for the Expensive Car Supplement on a car you intend to buy at the end. Sal-sac doesn't usually allow that, but if it does, the £335/year supplement applies for years 2 to 6 of registration. (Currently EVs are exempt from this supplement, but the exemption ends with cars registered after April 2025.)
When it's the obvious win
- You're a 40% (or 45%) taxpayer and on a stable career path.
- You don't have £25,000+ of cash sitting around for an outright purchase.
- You value certainty of running cost (lease bundles insurance, servicing, tyres, breakdown).
- You want a brand-new car under full warranty without taking the new-car depreciation hit.
- You'd rather not own a depreciating asset.
Run the maths on your own numbers
If you've got a real scheme quote in front of you, plug it into the salary-sacrifice calculator. It models the full BiK trajectory through 2029/30 and shows you year-by-year what the net monthly cost actually is across the term.
How to get a real quote
Two routes:
- Through your employer's scheme. HR or payroll should be able to give you an indicative quote in 24 to 48 hours. The big providers in 2026 are Octopus Electric Vehicles, Tusker, Octopus EV (a separate operation), Loveelectric, and a handful of fleet brokers.
- Direct from a sal-sac provider. Most will give you a quote based on your employer being on their panel; if not, they can sometimes onboard your employer specifically (typically takes 2 to 4 weeks).
Either way, the number to focus on is the net monthly cost, not the gross. Gross is what comes off your pay packet; net is what you actually feel after the tax saving. Some scheme literature emphasises gross; that's the salesy framing.
What this means for the buyer report
Section 9 of every Compass EV report — "The financial option you didn't ask about" — does this maths against the specific car shortlisted for you, with your actual mileage, the actual P11D, your stated tax bracket, and the BiK trajectory for the term you're considering. We don't get paid by any scheme provider; we don't have a panel; the comparison is unbiased.
If you're choosing between a used purchase and a salary-sacrifice lease, that section alone often pays for the report several times over.
Related
- Salary sacrifice calculator — net monthly cost for your specific scheme quote, full BiK trajectory through 2029/30.
- EV depreciation in 2026 — relevant if you're weighing salary sacrifice against an outright used purchase; depreciation risk is the lessor's problem under sal-sac, yours under purchase.
- The four reasons an EV is the wrong call — salary sacrifice availability changes the call for several of the borderline cases.