NHS Salary Sacrifice: Lease Cars, Bikes and Tech, and What They Really Cost

Cycle to work: the best deal

Bikes and cycling safety equipment are one of the few benefits HMRC doesn't tax at all under salary sacrifice. A £1,200 bike paid for over 12 months (£100 a month) costs a new Band 5 about £65.36 a month in take home, £784 in total. That saving comes from tax, NI and a smaller pension contribution.

Electric lease cars

Electric cars are taxed as a company car benefit: in 2026/27 the taxable value is 4% of the list price, rising by a point a year. Take a £450 a month lease on a car with a £40,000 list price, for someone at the bottom of Band 6. The sacrifice cuts take home by £254.16 a month, and the benefit in kind adds about £26.67 a month of income tax, so the real cost is about £280.83 a month for a car whose lease is £450. Check what the lease includes, such as insurance and servicing, and compare the whole package with what you'd pay privately.

For petrol and diesel cars the company car tax is much higher, so the saving is far smaller.

Tech, gym and other schemes

For most other benefits, HMRC values what you get at the higher of the salary you give up or the normal benefit in kind charge. You're taxed on that value, so a scheme for phones, laptops or white goods saves far less than a bike or an electric car. Ask the provider for an illustration that includes the benefit in kind tax before you sign up.

It lowers your NHS pension

The amount you sacrifice comes off your pay before your pension contribution is worked out, so you pay less into the pension and build up less: the 2015 Scheme adds 1/54th of your pensionable pay each year. The £450 a month car above reduces your pensionable pay by £5,400 a year, about £100 a year less pension for every year of the lease. Your NHS pension contributions themselves can't be paid by salary sacrifice.

It can reduce maternity pay and other benefits

Band 2: almost no room

A salary sacrifice can't take your cash pay below the National Minimum Wage. Full-time Band 2 pay in England is only about £35 a month above the National Living Wage of £12.71 an hour, so most schemes are out of reach unless you work extra hours.

You're usually locked in

A salary sacrifice is a change to your contract for an agreed period. You normally can't switch back to cash pay when you like, though agreements can allow changes after big life events such as marriage, divorce or pregnancy. Check what happens if you leave your job or go on long-term leave during a car lease before you sign.

Put it in the calculator

The take home calculator has a salary sacrifice field for exempt schemes such as cycle to work: it takes the amount off before tax, NI and pension.