Polestar salary sacrifice is appealing to UK drivers, the sleek Scandinavian design and cutting-edge electric technology combined with the tax benefits of a salary sacrifice electric car scheme is a winning combination.
A salary sacrifice scheme allows employees to sacrifice a portion of their salary in exchange for non-cash benefits, such as the lease of a Polestar EV. This arrangement can lead to considerable savings making it an attractive option for both employers and employees.
In guide, we look at salary sacrifice examples for Polestar’s two standout models; the Polestar 2 and Polestar 3. Using the P11D list prices and standard monthly EV lease rates, we present a detailed breakdown of potential costs and savings across various tax brackets.
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How we calculated our Polestar Salary Sacrifice examples
Each example breaks down the potential savings and costs involved in a salary sacrifice scheme, which includes:
- The amount of income tax saved
This is calculated as a percentage of the monthly lease cost and depends on your income tax band. - National Insurance (NI) savings
For these examples, an employee’s NI rate of 2% was applied to the monthly lease cost. - The Benefit In Kind (BIK) that would be paid
BIK is a tax applied to employees who receive benefits or perks on top of their salary. The current rate of 2% of the P11D price (divided by 12 for a monthly figure) was used. - The employer’s NI contribution to the BIK value
This is calculated at a rate of 13.8% on the BIK value. - The net cost
This represents the overall monthly cost to the employee after all deductions and additions. - Monthly lease cost
We took this figure from the current Octopus Electric Vehicles price.
These calculations provide a starting point for understanding how an electric car salary sacrifice scheme could impact your monthly outgoings if you were to lease or subscribe to a Polestar. They should be used as a guide rather than definitive advice, and it is always recommended to consult with an accountant for personalised advice.
Polestar Salary Sacrifice example @ 20% tax rate
| Polestar Model | P11D Price | Monthly Lease Cost | Income Tax Saved (20% band) | NI Saved (12%) | BIK Paid @ 2% | Employer's NI on BiK (13.8%) | Net Cost (20% band) |
|---|---|---|---|---|---|---|---|
| Polestar 2 | £44,950 | £672 | £134.40 | £13.44 | £74.92 | £10.34 | £599.08 |
| Polestar 3 | £79,900 | £1209 | £241.80 | £24.18 | £133.17 | £18.38 | £1076.19 |
Polestar 2 Salary Sacrifice example @ 20% tax rate
- P11D list price: £44,950
- Monthly lease cost: £672
- Income tax rate: 20%
- Income tax Saved: £672 x 20% = £134.40
- National Insurance (NI) Saved: £672 x 2% = £13.44
- Benefit In Kind (BIK) Paid @ 2%:(£44,950 x 2%) ÷ 12 = £74.92
- Employer’s National Insurance (NI) on BiK: (£74.92 x 13.8%) = £10.34
Net monthly cost: £672 – £134.40 – £13.44 + £74.92 = £599.08
Polestar 3 Salary Sacrifice example @ 20% tax rate
- P11D list price: £79,900
- Monthly lease cost: £1209
- Income tax rate: 20%
- Income tax Saved: £1209 x 20% = £241.80
- National Insurance (NI) Saved: £1209 x 2% = £24.18
- Benefit In Kind (BIK) Paid @ 2%: (£79,900 x 2%) ÷ 12 = £133.17
- Employer’s National Insurance (NI) on BiK: (£133.17 x 13.8%) = £18.38
Net monthly cost: £1209 – £241.80 – £24.18 + £133.17 = £1076.19
Polestar Salary Sacrifice example @ 40% tax rate
| Polestar Model | P11D Price | Monthly Lease Cost | Income Tax Saved (40% band) | NI Saved (12%) | BIK Paid @ 2% | Employer's NI on BiK (13.8%) | Net Cost (40% band) |
|---|---|---|---|---|---|---|---|
| Polestar 2 | £44,950 | £672 | £268.80 | £13.44 | £74.92 | £10.34 | £464.68 |
| Polestar 3 | £79,900 | £1209 | £483.60 | £24.18 | £133.17 | £18.38 | £834.39 |
Polestar 2 Salary Sacrifice example @ 40% tax rate
- P11D list price: £44,950
- Monthly lease cost: £672
- Income tax rate: 40%
- Income tax Saved: £672 x 40% = £268.80
- National Insurance (NI) Saved: £672 x 2% = £13.44
- Benefit In Kind (BIK) Paid @ 2%: (£44,950 x 2%) ÷ 12 = £74.92
- Employer’s National Insurance (NI) on BiK: (£74.92 x 13.8%) = £10.34
Net monthly cost: £672 – £268.80 – £13.44 + £74.92 = £464.68
Polestar 3 Salary Sacrifice example @ 40% tax rate
- P11D list price: £79,900
- Monthly lease cost: £1209
- Income tax rate: 40%
- Income tax Saved: £1209 x 40% = £483.60
- National Insurance (NI) Saved: £1209 x 2% = £24.18
- Benefit In Kind (BIK) Paid @ 2%: (£79,900 x 2%) ÷ 12 = £133.17
- Employer’s National Insurance (NI) on BiK: (£133.17 x 13.8%) = £18.38
Net monthly cost: £1209 – £483.60 – £24.18 + £133.17 = £834.39
Polestar Salary Sacrifice example @ 45% tax rate
| Polestar Model | P11D Price | Monthly Lease Cost | Income Tax Saved (45% band) | NI Saved (12%) | BIK Paid @ 2% | Employer's NI on BiK (13.8%) | Net Cost (45% band) |
|---|---|---|---|---|---|---|---|
| Polestar 2 | £44,950 | £672 | £302.40 | £13.44 | £74.92 | £10.34 | £431.08 |
| Polestar 3 | £79,900 | £1209 | £544.05 | £24.18 | £133.17 | £18.38 | £774.94 |
Polestar 2 Salary Sacrifice example @ 45% tax rate
- P11D list price: £44,950
- Monthly lease cost: £672
- Income tax rate: 45%
- Income tax Saved: £672 x 45% = £302.40
- National Insurance (NI) Saved: £672 x 2% = £13.44
- Benefit In Kind (BIK) Paid @ 2%: (£44,950 x 2%) ÷ 12 = £74.92
- Employer’s National Insurance (NI) on BiK: (£74.92 x 13.8%) = £10.34
Net monthly cost: £672 – £302.40 – £13.44 + £74.92 = £431.08
Polestar 3 Salary Sacrifice example @ 45% tax rate
- P11D list price: £79,900
- Monthly lease cost: £1209
- Income tax rate: 45%
- Income tax Saved: £1209 x 45% = £544.05
- National Insurance (NI) Saved: £1209 x 2% = £24.18
- Benefit In Kind (BIK) Paid @ 2%: (£79,900 x 2%) ÷ 12 = £133.17
- Employer’s National Insurance (NI) on BiK: (£133.17 x 13.8%) = £18.38
Net monthly cost: £1209 – £544.05 – £24.18 + £133.17 = £774.94
The final word on Polestar salary sacrifice schemes
In our review of Polestar salary sacrifice examples, we can see that Polestar salary sacrifice can offer significant tax benefits. As you move up through the tax brackets, the savings increase.
Through this guide, we hope you’ve gained a clearer perspective on the potential advantages of taking a Polestar EV on a salary sacrifice scheme. These examples provide a general understanding, it’s crucial to consult with your financial advisor to work out your own individual circumstances and if you can afford a Polestar salary sacrifice.
- Free Ohme home charger
- 4,000 free miles of charging
- Intelligent Octopus EV tariff
- Public charging via Octopus Electroverse
- All EV's on the market
- Built-in early termination protection
John is the Editor and Spokesperson for Electric Car Guide.
With over 20 years of writing experience, he has written for titles such as City AM, FE News and NerdWallet.com, covering various automotive and personal finance topics.
John’s market commentary has been covered by the likes of The Express, The Independent, Yahoo Finance and The Evening Standard.
