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Costs

The Pink Salary Exchange salary sacrifice car scheme is a cost-effective way to reduce the carbon footprint of both an employer and an employee. It is the next generation of salary sacrifice car schemes and takes advantage of our 20 + years’ experience in the industry. Our product has been designed using the expertise of our partners in motor manufacturing and leasing, taxation, insurance and finance.

So in terms of a financial impact we know that we can offer the very best electric vehicle lease deals on the market, but we also know that you need to understand the full breakdown of costs involved.

First of all you should be aware that there is no deposit necessary for leasing a vehicle through the Pink Salary Exchange, once an employee has signed up under their employer’s salary sacrifice car scheme, the only payment required to secure use of the electric vehicle is the fixed monthly payment. This covers the lease of the vehicle, plus service & maintenance, insurance and road tax.

What is Benefit-in-Kind tax in a salary sacrifice car scheme?

When an employee receives a non-cash benefit through their employer, they are liable to pay Benefit-In-Kind (BIK) tax. In this case, the employee is receiving a company car and therefore needs to pay a BIK contribution, otherwise known as company car tax.

In order to calculate what BIK tax the employee will be liable for, they should find out what the BIK percentage banding is. This is a percentage figure which is applied to every vehicle, and is based on CO2 emissions, a P11D list price value (including extras and VAT, but without the first year registration fee) and vehicle tax.

So now they should multiply the P11D value by the BIK percentage banding, then multiply that figure by the employee’s tax band – i.e. 20%, 40% etc. To simplify this, there are lots of online tools available, so if you search for ‘company car tax calculator’ this makes this process very easy.

What is the true cost of a salary sacrifice scheme to the employee?
We have put together two examples of what different electric vehicles will cost an employee, to offer a range of information from a lower-spec smaller vehicle, to a high-spec luxury vehicle. These figures are the estimate of the true net monthly cost to the employee of taking this car via salary sacrifice. It includes the car, full maintenance and insurances and the BIK tax.
Mercedes-Benz EQA
- 20% Tax Rate
  =
  £458 p/m
- 40% Tax Rate
  =
  £409 p/m
- 45% Tax Rate
  =
  £379 p/m
- 60% Tax Rate
  =
  £294 p/m
What is the true cost of a salary sacrifice scheme to the employee?
We have put together two examples of what different electric vehicles will cost an employee, to offer a range of information from a lower-spec smaller vehicle, to a high-spec luxury vehicle. These figures are the estimate of the true net monthly cost to the employee of taking this car via salary sacrifice. It includes the car, full maintenance and insurances and the BIK tax.
SEAT Mii One Electric
- 20% Tax Rate
  =
  £355 p/m
- 40% Tax Rate
  =
  £208 p/m
- 45% Tax Rate
  =
  £194 p/m
- 60% Tax Rate
  =
  £150 p/m
What is the true cost of a salary sacrifice scheme to the employee?
We have put together two examples of what different electric vehicles will cost an employee, to offer a range of information from a lower-spec smaller vehicle, to a high-spec luxury vehicle. These figures are the estimate of the true net monthly cost to the employee of taking this car via salary sacrifice. It includes the car, full maintenance and insurances and the BIK tax.
Mercedes-Benz EQA
- 20% Tax Rate
  =
  £458 p/m
- 40% Tax Rate
  =
  £409 p/m
- 45% Tax Rate
  =
  £379 p/m
- 60% Tax Rate
  =
  £294 p/m
What is the true cost of a salary sacrifice scheme to the employee?
We have put together two examples of what different electric vehicles will cost an employee, to offer a range of information from a lower-spec smaller vehicle, to a high-spec luxury vehicle. These figures are the estimate of the true net monthly cost to the employee of taking this car via salary sacrifice. It includes the car, full maintenance and insurances and the BIK tax.
SEAT Mii One Electric
- 20% Tax Rate
  =
  £355 p/m
- 40% Tax Rate
  =
  £208 p/m
- 45% Tax Rate
  =
  £194 p/m
- 60% Tax Rate
  =
  £150 p/m

Employees should also be aware that a lower gross salary may also impact upon pension contributions, holiday entitlement or paternity/maternity leave, but this should be discussed with an individual employer, because policies change according to each organisation.

What is Benefit-in-Kind tax in a salary sacrifice car scheme?

What is the true cost of a salary sacrifice scheme to the employee?

Mercedes-Benz EQA

What is the true cost of a salary sacrifice scheme to the employee?

SEAT Mii One Electric

What is the true cost of a salary sacrifice scheme to the employee?

Mercedes-Benz EQA

What is the true cost of a salary sacrifice scheme to the employee?

SEAT Mii One Electric