1. What is EV Salary Sacrifice?

EV salary sacrifice is a UK scheme where employees give up part of their salary in exchange for an electric vehicle. This reduces taxable income, resulting in lower income tax and National Insurance contributions.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( Gross\ Pay \) — Annual salary before deductions
• \( Income\ Tax \) — Estimated income tax amount
• \( National\ Insurance \) — Estimated NI contributions
• \( EV\ Sacrifice \) — Annual amount sacrificed for the electric vehicle

Explanation: The calculation shows your take-home pay after accounting for the EV salary sacrifice scheme.

3. Benefits of EV Salary Sacrifice

Details: The scheme can save employees 30-60% on electric vehicle costs through reduced tax and NI contributions, while also providing a company car without the traditional tax implications.

4. Using the Calculator

Tips: Enter your gross annual salary, estimated income tax, National Insurance contributions, and the annual amount you'll sacrifice for the EV. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How much can I save with EV salary sacrifice?
A: Savings typically range from 30-60% compared to personal leasing, depending on your tax bracket and the vehicle's value.

Q2: Are there any risks to salary sacrifice?
A: Your take-home pay will be reduced, and if you leave employment, you may need to return the vehicle.

Q3: What vehicles qualify for the scheme?
A: Only pure electric vehicles (BEVs) qualify for the lowest Benefit-in-Kind tax rates.

Q4: How does this affect my pension?
A: Salary sacrifice can reduce pensionable earnings, though some employers make additional contributions to offset this.

Q5: Is there a minimum salary requirement?
A: Most schemes require your reduced salary to stay above the National Minimum Wage.