BIK & Salary Sacrifice Calculator
How much Benefit-in-Kind tax will you actually pay on a company electric car in 2026/27? Work out your annual and monthly BIK bill — and see what an EV costs through salary sacrifice compared with a petrol or hybrid.
Your company car details
Monthly BIK tax — same car, different fuel types
Assumes the same P11D price and your salary's income tax rate.
2026/27 BIK rates (HMRC)
Electric & plug-in hybrid cars
| Fuel type | Zero-emission range / emissions | BIK rate 2026/27 |
|---|---|---|
| Battery electric (EV) | 0 g/km | 4% |
| Plug-in hybrid | 130 miles or more | 4% |
| Plug-in hybrid | 70–129 miles | 7% |
| Plug-in hybrid | 40–69 miles | 10% |
| Plug-in hybrid | 30–39 miles | 14% |
| Plug-in hybrid | Under 30 miles | 16% |
Petrol & diesel cars (by CO₂)
| CO₂ (g/km) | Petrol rate | Diesel (non-RDE2) rate |
|---|---|---|
| 1–50 | 16% | 20% |
| 51–54 | 17% | 21% |
| 55–59 | 18% | 22% |
| 60–64 | 19% | 23% |
| 65–69 | 20% | 24% |
| 70–74 | 21% | 25% |
| 75–79 | 22% | 26% |
| 80–84 | 23% | 27% |
| 85–89 | 24% | 28% |
| 90–94 | 25% | 29% |
| 95–99 | 26% | 30% |
| 100–104 | 27% | 31% |
| 105–109 | 28% | 32% |
| 110–114 | 29% | 33% |
| 115–119 | 30% | 34% |
| 120–124 | 31% | 35% |
| 125–129 | 32% | 36% |
| 130–134 | 33% | 37% |
| 135–139 | 34% | 37% |
| 140–144 | 35% | 37% |
| 145–149 | 36% | 37% |
| 150 or more | 37% (max) | 37% (max) |
Diesel cars that do not meet RDE2 emissions standards get a 4 percentage-point surcharge, capped at 37%. Rates shown are for the 2026/27 tax year.
Frequently asked questions
What is BIK tax and how is it calculated?
Benefit-in-Kind (BIK) is the tax you pay when your employer provides a company car for private use. It is calculated as:
- BIK taxable value = P11D price × the car's BIK percentage
- Annual BIK tax = taxable value × your income tax rate (20%, 40% or 45%)
The BIK percentage depends on the car's CO₂ emissions — and for plug-in hybrids, its zero-emission driving range. Electric cars with 0 g/km are taxed at just 4% in 2026/27.
Why are electric cars so cheap on BIK?
Since April 2020 the Government has kept the BIK rate for zero-emission cars deliberately low to encourage the switch to electric. In 2026/27 an EV is taxed at just 4% of its P11D price — while an equivalent petrol car emitting around 130 g/km is taxed at 33%. On a £40,000 car for a 40% taxpayer, that is the difference between roughly £53 and £440 a month in tax.
How does salary sacrifice work for an EV?
With salary sacrifice, you give up part of your gross salary in exchange for the lease of an electric car. Because the lease payment comes out before tax and National Insurance, you save income tax and employee NI on that amount. You then pay BIK tax on the car itself. Your net monthly cost is roughly:
- Gross lease payment × (1 − your income tax rate − your employee NI rate)
- plus your monthly BIK tax
Most salary sacrifice schemes only offer cars with a BIK rate of 4% — effectively, electric cars. Some employers add a small administration fee.
What is the P11D price?
The P11D price is the car's list price including VAT, delivery and any factory-fitted options — before any discounts. It's the figure your employer reports to HMRC and it's what the BIK percentage is applied to. It is shown on form P11D and on most company car quote tools.
Do I pay extra tax if my employer pays for charging?
No — since April 2025, if your employer pays for electricity for your company car — whether at home, at work or at public charge points — there is no additional taxable benefit, as long as the charging is for the company car. This was confirmed by HMRC and means an EV company car remains an exceptionally tax-efficient choice. Always check the latest HMRC guidance for your specific arrangement.
What about my employer's National Insurance?
Your employer pays Class 1A National Insurance of 15% (2026/27) on the BIK taxable value of your company car. That's an employer cost, not deducted from your pay — but it's part of why some employers cap salary sacrifice schemes or charge a small fee to cover it.
Sources: GOV.UK — Tax on company cars; HMRC — company car and van benefit rates (2026/27); GOV.UK — Tax on company benefits. BIK rates verified July 2026. Income tax and NI thresholds are for England; Scottish and Welsh taxpayers may pay different rates.
This calculator is a guide only and does not constitute financial or tax advice. Actual BIK depends on your exact car specification, the P11D price reported by your employer, your total income and where you live in the UK. Salary sacrifice figures are estimates: they assume you pay the standard employee NI rate on the sacrificed amount and ignore student loans, pensions and other salary deductions. For personal tax decisions, check the latest HMRC guidance or speak to an accountant.