Finance question (car payments)

[Trackdayer]

Hi all.

The other half earns £31k and wants to get a new car worth around £20k on 3 year lease hire. A scheme through her work (NHS) does this, which takes the payments from her pre-tax pay.

How do I calculate how this stacks up against a "normal" lease deal, which would come out of her post-tax pay?

Thanks

[thekingisdead]

Multiply the monthly payment by the marginal tax rate.

(0.8 for lower rate, 0.6 for higher rate)

That’s your ‘net’ cost.

If it’s paid via salary sacrifice, you include the N.I saving

(Multiply by ~0.68 and 0.58)

There may be online calculators.
I’m not an accountant.

[CaptainSlow]

For the salary sacrifice vehicle you look at the gross cost and deduct the marginal tax and ni rate. In addition you then add the tax on the vehicle BIK amount. Compare that to the private lease amount.

I am an accountant but not a very good one.

Edited by CaptainSlow on Tuesday 12th January 17:56

[Trackdayer]

Thankyou gents that's just what I need.

Now to factor in the insurance and we'll have an answer!

[AnotherGuy]

Don't forget to take into account that salary sacrifice can also lower the amount paid into the NHS pension scheme. This can have some a pretty drastic effect if a person decides to stay in the scheme for a number of years.

https://www.benefitseveryone.co.uk/salary-sacrific...

Includes a calculator at the bottom to help you work out the impact.