What will I get? Base only vs base + car allowance

handsy

Let's say I get a job offer for £40,000 from Company_A.
I also get a job offer for £35,000 + £5,000 car allowance from Company_B.
Ignoring the obvious that Company_B won't be putting as much in to my pension, will my 'take home' be identical from both offers?

Many thanks

Jemima09

Your personal pension contribution would also be different, as car allowance isn't factored in.. assuming you pay in at 5% it's around £20 more per month that you would pay in your pension if you took the straight £40k from A. Although if it's a salary sacrifice you'd get a small decrease in tax, so your takehome pay might not be affected as much.

They're treated the same for tax purposes so that doesn't factor in.

The other thing is if you're being offered the same bonus % at each, that won't factor in the car allowance so you'd get less at B.

There's a couple of other places where it could factor in, because your 'day rate' at B is less, so if they were paying you holidays when you left, your day rate wouldn't take the car in to account.. but that shouldn't be enough to worry about!

handsy

Thanks for quick reply Jemima09.
I've also taken a look on https://listentotaxman.com/ and I can see that the difference is negligible between the two.

Jemima09

yeah on a monthly basis it's tiny. The only time you'd notice really is the bonus thing. If you're in a position to negotiate and you prefer co B, you could always ask if they would match based on the amount. e.g if 10% at A, ask for 12% at B.

bap98189

That depends. Normally with a car allowance, you are expected to buy/lease and maintain a car which meets a certain specification. Unless you want/need a newish car then you will not be seeing the benefit of the car allowance.

Jemima09

bap98189 wrote: »

That depends. Normally with a car allowance, you are expected to buy/lease and maintain a car which meets a certain specification. Unless you want/need a newish car then you will not be seeing the benefit of the car allowance.

Not always though, I receive a car allowance but continued to drive and maintain the same car as before, so it is just additional salary.