Tesla salary sacrifice: what a Model 3 or Y really costs
Salary sacrifice turns a Tesla lease into pre-tax pay, and 4% benefit-in-kind keeps the tax bill small. We worked out what a Model 3 and a Model Y cost each month in every tax band.
Quick answers
- On our sums, a Tesla Model 3 RWD quoted at £682 a month gross costs about £516 a month after tax for a basic-rate taxpayer and £446 for a higher-rate taxpayer in 2026/27.
- A Model Y RWD quoted at £768 a month gross costs about £583 a month for a basic-rate taxpayer, £505 at the higher rate and £382 for someone earning between £100,000 and £125,140.
- Electric cars pay 4% benefit-in-kind in 2026/27, so a £44,990 Model Y adds only about £30 a month in tax for a basic-rate payer and £60 for a higher-rate payer.
- Benefit-in-kind rises to 5% in 2027/28, 7% in 2028/29, 9% in 2029/30 and 10% in 2030/31, so the tax part of a three or four-year agreement grows each year.
- Salary sacrifice cannot take your cash pay below the £12.71 an hour National Living Wage, so a full-time worker needs a salary of about £34,000 to sacrifice £768 a month.
- The Model 3 starts at £37,990 and the Model Y at £44,990 in November 2026, both under the £50,000 expensive car supplement threshold.
- Quotes vary widely: one provider listed a Model 3 at £311 and a Model Y at £391 a month net over 48 months and 5,000 miles a year, with insurance included.
On our sums, a Tesla Model Y quoted at £768 a month gross through salary sacrifice costs about £583 a month after tax for a basic-rate taxpayer and about £505 for a higher-rate taxpayer in 2026/27. A Model 3 quoted at £682 comes down to about £516 and £446.
Those figures include the benefit-in-kind (BIK) tax you pay for having the car, which is 4% of the list price for electric cars this tax year. The gap between the gross quote and what you really pay is the income tax and National Insurance you no longer pay on the sacrificed salary. The higher your tax band, the bigger the gap.
How does Tesla salary sacrifice work?
Tesla does not run its own UK salary sacrifice scheme. Your employer signs up with a provider, and some providers, including The Electric Car Scheme and Loveelectric, list the Model 3 and Model Y. The provider leases you the car, and the monthly cost comes out of your pay before income tax and National Insurance are worked out.
Because the car counts as a company benefit, HMRC charges BIK on it. For cars emitting 75g/km of CO2 or less, which includes every Tesla, HMRC’s guidance says the normal BIK charge applies rather than the value of the salary given up. That is why an electric car works so well here: the tax on the car is small, while the tax saved on the salary is large.
Packages usually bundle maintenance, tyres, breakdown cover and road tax into the monthly price. Insurance varies. The Electric Car Scheme’s January 2026 Tesla quotes include maintenance and breakdown cover, while Loveelectric’s prices include insurance. Our general guide to how EV salary sacrifice works covers the HMRC rules in more detail.
What does a Model 3 or Model Y cost on salary sacrifice?
The table shows EV Compared’s net monthly cost by tax band for 2026/27.
Method: gross sacrifice × (1 minus your income tax rate minus your NI rate), plus list price × 4% × your income tax rate ÷ 12.
The gross figures are The Electric Car Scheme’s quotes for a Model 3 RWD (£682) and Model Y RWD (£768) over 36 months and 10,000 miles a year, published in January 2026. For BIK we used the list prices on Carwow on 1 November 2026: £37,990 for the Model 3 and £44,990 for the Model Y. NI is 8% in the basic-rate band and 2% above it.
| Tax band (England, Wales, NI) | Tax + NI saved | Model 3 RWD net a month | Model Y RWD net a month |
|---|---|---|---|
| Basic rate, 20% | 28% | £516 | £583 |
| Higher rate, 40% | 42% | £446 | £505 |
| £100,000 to £125,140, effective 60% | 62% | £335 | £382 |
| Additional rate, 45% | 47% | £418 | £475 |
| Gross quote, no tax relief | 0% | £682 | £768 |
The table assumes the whole sacrifice falls inside one tax band. If it straddles two bands, your figure will fall between the two rows.
For a higher-rate taxpayer, the Model Y comes out £263 a month cheaper than the gross quote, a 34% saving. For a basic-rate taxpayer, the saving is £185 a month, or 24%.
The band from £100,000 to £125,140 gives the biggest saving. In that band you lose £1 of Personal Allowance for every £2 you earn, which makes the effective income tax rate 60%. Sacrificing salary in that band also gives you back some of the allowance.
Scotland has different income tax bands, so Scottish taxpayers should use their own rates in the same formula.
Why do providers quote different net figures?
The Electric Car Scheme’s own net figures for the £80,000 earner were £464 for the Model 3 and £517 for the Model Y, a little above ours. The provider spreads the average BIK over the whole term, while we used only the 2026/27 rate. Both methods are reasonable; ours shows what leaves your payslip this tax year.
Term, mileage and cover also change the price. Loveelectric listed the Model 3 from £311 and the Model Y from £391 a month net for a £55,000 earner. Those prices assume a 48-month term and 5,000 miles a year, with insurance included. The Electric Car Scheme’s October 2026 quote for a Model Y Premium Long Range RWD was £986 gross, or £678 net at 40%, including insurance.
The entry Model Y has also risen £3,000 in price since the January quotes, as our October 2026 Tesla price guide explains. A quote today may therefore differ from the January figures. Compare quotes on the same term, mileage and cover. If one excludes insurance, add a Tesla insurance quote before comparing.
How much BIK tax will you pay on a Tesla?
In 2026/27 a Model 3 at £37,990 has a taxable benefit of £1,520. A Model Y at £44,990 has a taxable benefit of £1,800. Those cost about £25 and £30 a month at the basic rate, and about £51 and £60 at the higher rate.
The rate then climbs every April, so a three or four-year agreement signed now will cost a little more each year.
| Tax year | EV BIK rate | Model Y monthly BIK at 40% |
|---|---|---|
| 2026/27 | 4% | £60 |
| 2027/28 | 5% | £75 |
| 2028/29 | 7% | £105 |
| 2029/30 | 9% | £135 |
| 2030/31 | 10% | £150 |
The 10% rate for 2030/31 was confirmed in the 28 October 2026 Budget. Even at 7%, a higher-rate taxpayer’s Model Y would cost about £550 a month on the January quote, still well under the £768 gross figure. Our Tesla company car tax guide covers BIK for every Model 3 and Model Y version.
Does the expensive car supplement matter?
Not for the entry cars. In November 2026 the Model 3 starts at £37,990 and the Model Y at £44,990, both under the £50,000 threshold for electric cars that has applied since 1 April 2026.
The Model Y Premium Long Range AWD (£52,990) and the Performance (£61,990) are above it. Those cars carry the extra £440 a year in vehicle tax. Road tax is part of the monthly package, so the supplement is priced into the rental rather than billed to you separately. A higher list price also means more BIK.
Who can’t get a Tesla on salary sacrifice?
Salary sacrifice must not take your cash pay below the National Minimum Wage. The National Living Wage is £12.71 an hour from April 2026, which comes to about £24,780 a year for a 37.5-hour week.
To sacrifice £768 a month (£9,216 a year) for the Model Y, a full-time employee would need a salary of about £34,000. For the Model 3 at £682 a month, they would need about £33,000. Below those salaries, a cheaper car or a longer term may be the only way in.
The other risk is leaving your job, because the agreement depends on your employment. Check the early termination terms before you sign. Our guide to what happens if you leave your job covers the usual outcomes.
Model 3 or Model Y: which makes more sense on salary sacrifice?
The Model 3 is the cheaper car on every row of our table. It costs £47 to £67 a month less than the Model Y at the January 2026 quotes, depending on your tax band. Its lower list price also keeps the BIK bill smaller each year.
The Model Y costs more but gives you an SUV body and a larger boot. Our Model 3 vs Model Y comparison sets out the trade-offs. If you are weighing salary sacrifice against a private deal, salary sacrifice vs personal lease compares the total costs. With a home off-peak tariff such as Intelligent Octopus Go at 8p/kWh, charging adds relatively little to the monthly bill.
What to do next
Ask your HR or benefits team which provider your employer uses and whether it lists Tesla. Get quotes on the same term and mileage for the car you want, and check whether insurance is included. Then put your own gross quote and tax band into the formula above. That gives you the figure that matters: what actually leaves your take-home pay each month.
How we test and where our numbers come from
Range figures are official WLTP combined values taken from manufacturer UK specification pages, with real-world estimates drawn from independent comparative testing. Prices are UK list prices at the time of the latest update. Tax, grant and charging-scheme figures come from GOV.UK and HMRC publications. We re-check every guide when pricing, specification or policy changes. Last checked 1 November 2026. How we work out our own figures.
Frequently asked questions
Can you get a Tesla on salary sacrifice in the UK?
Yes, you can get a Tesla Model 3 or Model Y on salary sacrifice if your employer offers a scheme through a provider that lists Tesla, such as The Electric Car Scheme or Loveelectric. Tesla does not run its own UK salary sacrifice scheme. You lease the car through the provider and the cost comes out of your gross pay.
How much is a Tesla Model Y on salary sacrifice?
A Model Y RWD quoted at £768 a month gross costs about £583 a month after tax for a basic-rate taxpayer and about £505 for a higher-rate taxpayer in 2026/27, on our sums. The gross quote came from The Electric Car Scheme for 36 months and 10,000 miles a year with maintenance and breakdown cover.
How much is a Tesla Model 3 on salary sacrifice?
A Model 3 RWD quoted at £682 a month gross costs about £516 a month for a basic-rate taxpayer and about £446 for a higher-rate taxpayer in 2026/27. That includes benefit-in-kind tax at 4% on the £37,990 list price, which adds about £25 a month at the basic rate.
Is Tesla salary sacrifice worth it for a basic-rate taxpayer?
Yes, it usually still saves money, but less than for higher earners. On a £768 gross Model Y quote, a basic-rate taxpayer saves about £185 a month, or 24%, against paying the same amount from net pay. A higher-rate taxpayer saves about £263 a month, or 34%.
What benefit-in-kind do you pay on a Tesla salary sacrifice car?
You pay benefit-in-kind on 4% of the car's list price in 2026/27, at your income tax rate. For a £44,990 Model Y that is £1,800 of taxable benefit, costing £360 a year at 20% and £720 at 40%. The rate rises to 5% in April 2027 and 7% in April 2028.
Does the expensive car supplement apply to a Tesla on salary sacrifice?
It does not apply to the entry Model 3 at £37,990 or the entry Model Y at £44,990, because both are under the £50,000 threshold for electric cars. The Model Y Premium Long Range AWD at £52,990 and the Performance at £61,990 are above it, so they attract the extra £440 a year, which providers include in their monthly price along with road tax.
Sources and further reading
- electriccarscheme.comWhat EV can I afford on my salary?Model 3 RWD at £682 and Model Y RWD at £768 a month gross for an £80,000 earner, 36 months, 10,000 miles a year, maintenance and breakdown included, with provider net costs of £464 and £517 (page updated 2 January 2026).
- electriccarscheme.comNew Tesla Model Y 2026: price, range and is it still worth it?Model Y Premium Long Range RWD at £986 a month gross and £678 net for a 40% taxpayer, including insurance, over 36 months and 10,000 miles (prices correct October 2026); BIK 4% in 2026/27 and 5% in 2027/28.
- loveelectric.carsSalary sacrifice car prices: the best deals for the best EVsModel 3 from £311 and Model Y from £391 a month net for a £55,000 earner over 48 months and 5,000 miles a year, including insurance, servicing, tyres and breakdown cover.
- carwow.co.ukTesla Model 3 review and pricesModel 3 RRP of £37,990, checked 1 November 2026.
- carwow.co.ukTesla Model Y review and pricesModel Y RRP of £44,990, checked 1 November 2026.
- gov.ukIncome Tax rates and Personal Allowances2026/27 bands: 20% to £50,270, 40% to £125,140, 45% above, and the Personal Allowance reduced by £1 for every £2 over £100,000; Scotland has different bands.
- gov.ukNational Insurance rates and categoriesEmployee Class 1 NI for 2026/27: 8% between £242 and £967 a week, 2% above £967.
- gov.ukSalary sacrifice and the effects on PAYESalary sacrifice must not reduce cash earnings below the National Minimum Wage; cars of 75g/km or less are taxed on the normal benefit-in-kind charge.
- gov.ukNational Minimum Wage and National Living Wage ratesNational Living Wage of £12.71 an hour for workers aged 21 and over from April 2026.
- gov.ukAutumn Budget 2024: overview of tax legislation and ratesZero emission company car rates rise by 2 percentage points a year in 2028/29 and 2029/30, reaching 9%.
- evfleetworld.co.ukAutumn Budget 2026: government confirms BiK rates for 2030/31 as EV rates held lowThe 28 October 2026 Budget raises the zero emission rate from 9% to 10% for 2030/31.
EV Compared
The EV Compared editorial team tracks the UK electric vehicle market full time: new model launches, list prices, WLTP and real-world range, public charging tariffs and the tax rules that decide what an EV actually costs to run. Every guide is checked against manufacturer specifications and official GOV.UK figures, and updated whenever the numbers move.
Related reading
View all
Tesla Model 3 vs Model Y: which suits you?
Tesla sells the Model 3 saloon and the Model Y SUV at the same £44,990 starting point for very different cars. We worked out what each costs per mile of range and how much boot you get per pound.
EV Salary Sacrifice Explained: HMRC Rules and How Much You Save by Tax Band
A plain-English guide to pre-tax electric car schemes, BIK, and real savings
Tesla Model Y and Model 3 UK prices in October 2026
The entry Model Y now costs £44,990, £3,000 more than the £41,990 Standard it launched at in December 2025. Here are the Model Y and Model 3 prices.
Best home energy tariffs for Tesla owners
We worked out what 8,000 miles a year in a Tesla Model Y costs on each of the main UK EV tariffs, which ones connect to a Tesla directly, and where Tesla's own electricity licence stands.
Best Tesla alternatives in the UK: nine rivals ranked by price per mile of range
We divided the November 2026 list price of nine Tesla rivals by their official range. Four cars beat the best-value Tesla, and the Model Y comes last.
How much does it cost to charge a Tesla in the UK?
We worked out the cost of a full charge for every new Tesla Model 3 and Model Y on a smart home tariff, the standard price cap, Tesla's Superchargers and other public rapid chargers.