Company Car BIK Calculator
Enter your car's details to see the benefit in kind (BIK) percentage, the taxable benefit on your payslip, and what the car actually costs you each year.
Breakdown
Guide
A company car is a taxable benefit in kind. Your employer reports the value of the car on your payroll, and HMRC takes income tax on it through your tax code.
The calculation in three steps
1. Find your appropriate percentage from the CO2 table below.
2. Multiply your list price by that percentage to get your BIK value.
3. Pay income tax on that value at your marginal rate.
Appropriate percentages for 2026/27
| CO2 emissions / electric range | % of list price taxed |
|---|
Diesel cars that do not meet RDE2 (Real Driving Emissions Step 2) attract a 4% supplement, capped at 37%. Source: HMRC.
Your list price is not what you paid
The benefit is based on the list price when new, including VAT, delivery and factory-fitted options, excluding the first registration fee and road tax. A discount your employer negotiated does not reduce the benefit.
Electric vs petrol
A fully electric car is taxed at 4% of list price in 2026/27, rising to 5% from 6 April 2027. A typical petrol car at 120 g/km sits at 30%, so the same list price costs many times more in tax.
Company Car Benefit in Kind Explained
If your employer gives you a car to use, and you can use it privately, the benefit is treated as income. These are the points that catch people out most often.
1. The car is taxed on list price
Not on what the company paid, and not on what it is worth today. A car with a £30,000 list price still uses £30,000 three years later.
2. The band comes from CO2
Your car's CO2 figure decides the percentage. Cleaner cars sit in much lower bands, which is why electric and hybrid company cars cost so much less to run privately.
3. Plug-in hybrids are banded by range
Between 1 and 50 g/km, the percentage depends on how far the car goes on electricity alone. A hybrid with under 30 miles of range is taxed at four times the rate of a fully electric car.
4. Private fuel is taxed separately
If your employer pays for your private fuel, a separate fuel benefit charge applies on top of the car benefit. It is a fixed charge, no matter how little you actually drive.
5. Electricity is not fuel
There is no fuel benefit charge on an electric company car. Charging at work, or having a home charge point paid for by your employer, is normally not taxable either.
6. Your employer pays too
The company owes Class 1A National Insurance at 15% on the same taxable benefit, before any corporation tax relief. The employee's tax is only part of the cost of a company car.
7. The company car charge
Employers are allowed to charge you for the private use of the car, at 20% to 45% of the BIK value depending on your earnings. Check your contract or payslip for your rate.
8. Part-year cars are pro-rated
If the car was only available part of the tax year, the benefit is scaled down by the number of months you had it.
9. Capital contributions help
A one-off contribution towards the cost of the car reduces the list price used for the benefit, up to £5,000. Salary sacrifice schemes work in a similar way.
This calculator provides estimates for guidance only. Income tax figures assume the rates for England, Wales and Northern Ireland, and Scottish bands differ. For decisions on tax, finance or legal matters, check with the relevant official source or a qualified adviser.