How do I calculate EV scheme contributions and company-car BiK?

An employer EV scheme (or company-car salary sacrifice) usually consists of two numbers: the monthly lease / sacrifice taken from your pay, and the benefit-in-kind (BiK) charged as taxable income. Mixing them up is one of the reasons a “cheap EV” quote can surprise you on net pay or Adjusted Net Income.

HMRC sets the tax treatment for company cars and salary sacrifice. Your provider sets the monthly contribution. Here’s how to put both into one picture.

1. Monthly sacrifice (the contribution)

This is the amount your employer deducts from gross pay each month under the scheme — typically the lease rental (sometimes plus insurance / service as packaged by the provider). Annual contribution is simply:

annual sacrifice = monthly sacrifice × 12

Because it is salary sacrifice, that amount usually comes off before income tax and employee NI, so your cash take-home falls by less than the headline monthly figure. Exact saving depends on your tax band and NI — higher-rate taxpayers generally save more per £1 sacrificed.

• Reduces cash pay, income tax, and employee NI.
• Can reduce Plan 1 / Plan 2 student loan repayments in PAYE (same earnings base as Class 1 NI).
• Lowers Adjusted Net Income — useful near the £100k childcare / personal-allowance cliff.

2. Company-car BiK (the taxable benefit)

Separately, HMRC treats the car as a taxable benefit. For most company cars:

annual BiK = (P11D / gross list price) × BiK %

The % is the appropriate percentage for the tax year (CO₂ / electric range). Fully electric cars sit at a low rate (this calculator uses 2026/27 rates, e.g. 4% for 0g CO₂). Hybrids step up as electric range falls.

Example: £45,000 list price at 4% → £1,800 / year BiK (£150 / month taxable benefit).

• Adds to taxable income and to ANI.
• Does not attract employee Class 1 NI.
• Does not usually increase the student-loan PAYE base the way cash earnings do.
• Tax on BiK is collected via PAYE / tax code.

Rule of thumb: sacrifice is cash leaving payroll; BiK is taxable value added back. Net effect ≈ tax+NI saved on the sacrifice, minus income tax on the BiK.

What you need from your quote

• Monthly employee contribution (sacrifice amount).
• Gross / P11D list price used for BiK — not always the “from £…” advert price.
• Vehicle type — fully electric vs hybrid (and electric range if hybrid), so you can pick the right BiK %.
• Whether insurance, maintenance, or home charger are inside the sacrifice or billed separately.

Calculate EV scheme impact →

Sources on gov.uk

• Tax on company cars
• Company car BiK percentages
• Salary sacrifice and PAYE
• Adjusted net income
• Expenses and benefits: company cars

Not official HMRC guidance. Confirm current BiK rates and your scheme terms on gov.uk and with your employer or provider.