BIK Car Calculator
Use our Benefit in Kind (BiK) calculator to help you estimate the tax payable on a company car.
If your business provides company cars to employees or directors, it’s important to understand how Benefit in Kind (BiK) tax works. Our free Benefit in Kind Car Calculator helps you estimate the tax payable on a company car, making it easier to compare vehicles and understand the potential cost before making a decision.
Whether you’re a small business owner, company director, or employee choosing your next company car, this calculator provides a quick estimate based on the vehicle’s P11D value, CO₂ emissions, fuel type, and your income tax band.
Use the calculator below to estimate your annual and monthly Benefit in Kind tax.
What is Benefit in Kind (BiK)?
Benefit in Kind (BiK) is a tax charged on non-cash benefits provided by an employer. One of the most common examples is a company car that’s available for private use.
HMRC treats the use of a company car as an employee benefit, meaning you’ll usually pay tax based on the value of that benefit. The amount of tax depends on several factors, including:
- The vehicle’s P11D value (its list price including VAT and optional extras)
- The car’s CO₂ emissions
- The type of fuel it uses
- Your Income Tax band
Lower-emission vehicles generally attract lower BiK rates, which is one reason why electric company cars have become increasingly popular with UK businesses.
Why Should Businesses Consider Benefit in Kind?
Choosing the right company car can have a significant impact on both the business and the employee.
Understanding BiK tax can help businesses:
- Compare the overall cost of different company cars.
- Make more informed decisions when building an employee benefits package.
- Understand the tax implications before purchasing or leasing a vehicle.
- Explore lower-emission vehicles that may offer tax advantages.
For employees, knowing the expected BiK tax can help avoid surprises and make it easier to compare a company car against alternatives such as a car allowance.
How is Benefit in Kind Calculated?
Benefit in Kind is calculated using a combination of the vehicle’s P11D value and the BiK percentage set by HMRC.
The BiK percentage is largely determined by:
- CO₂ emissions
- Fuel type
- For plug-in hybrid vehicles, the electric-only driving range
The taxable benefit is then subject to your personal Income Tax rate, meaning higher-rate taxpayers will generally pay more tax than basic-rate taxpayers for the same vehicle. HMRC updates BiK rates each tax year, so it’s important to use current figures when comparing vehicles.
Choosing a Tax-Efficient Company Car
For many businesses, selecting a lower-emission vehicle can reduce the overall Benefit in Kind tax paid by employees. Fully electric vehicles typically attract much lower BiK percentages than petrol or diesel alternatives, while many modern hybrids also offer lower tax rates than traditional combustion engine vehicles, depending on their emissions and electric range.
While tax is an important consideration, businesses should also think about:
- Purchase or lease costs
- Running and maintenance costs
- Insurance premiums
- Employee mileage requirements
- Charging infrastructure for electric vehicles
Taking these factors into account can help ensure you choose a vehicle that meets both your operational needs and your budget.
Current BIK Bands for 2025 to 2030
The government has confirmed BIK rates up to the 2029–30 tax year. The table below shows the progression of rates for different CO₂ bands and electric ranges.
BIK Rates for Company Cars
| CO₂ Emissions (g/km) | 2024–25 | 2025–26 | 2026–27 | 2027–28 | 2028–29 | 2029–30 |
| 0 (Zero emission / Electric) | 2% | 3% | 4% | 5% | 7% | 9% |
| 1–50, Electric range >130 miles | 2% | 3% | 4% | 5% | 7% | 9% |
| 1–50, 70–129 miles | 5% | 6% | 7% | 8% | 10% | 12% |
| 1–50, 40–69 miles | 8% | 9% | 10% | 11% | 13% | 15% |
| 1–50, 30–39 miles | 12% | 13% | 14% | 15% | 17% | 19% |
| 1–50, <30 miles | 14% | 15% | 16% | 17% | 19% | 21% |
| 51–54 | 15% | 16% | 17% | 18% | 20% | 21% |
| 55–59 | 16% | 17% | 18% | 19% | 21% | 22% |
| 60–64 | 17% | 18% | 19% | 20% | 22% | 23% |
| 65–69 | 18% | 19% | 20% | 21% | 23% | 24% |
| 70–74 | 19% | 20% | 21% | 22% | 24% | 25% |
| 75–79 | 20% | 21% | 22% | 23% | 25% | 26% |
| 80–84 | 21% | 22% | 23% | 24% | 26% | 27% |
| 85–89 | 22% | 23% | 24% | 25% | 27% | 28% |
| 90–94 | 23% | 24% | 25% | 26% | 28% | 29% |
| 95–99 | 24% | 25% | 26% | 27% | 29% | 30% |
| 100–104 | 25% | 26% | 27% | 28% | 30% | 31% |
| 105–109 | 26% | 27% | 28% | 29% | 31% | 32% |
| 110–114 | 27% | 28% | 29% | 30% | 32% | 33% |
| 115–119 | 28% | 29% | 30% | 31% | 33% | 34% |
| 120–124 | 29% | 30% | 31% | 32% | 34% | 35% |
| 125–129 | 30% | 31% | 32% | 33% | 35% | 36% |
| 130–134 | 31% | 32% | 33% | 34% | 36% | 37% |
| 135–139 | 32% | 33% | 34% | 35% | 37% | 37% |
| 140–144 | 33% | 34% | 35% | 36% | 37% | 37% |
| 145–149 | 34% | 35% | 36% | 37% | 37% | 37% |
| 150–154 | 35% | 36% | 37% | 37% | 37% | 37% |
| 155–159 | 36% | 37% | 37% | 37% | 37% | 37% |
| 160–164 | 37% | 37% | 37% | 37% | 37% | 37% |
| 165+ | 37% | 37% | 37% | 37% | 37% | 37% |
Note: Diesel cars that do not meet RDE2 standards attract a 4% surcharge, up to the 37% cap.
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FAQs
Benefit in Kind (BiK) is a tax paid on non-cash benefits provided by an employer, such as a company car that’s available for personal use. HMRC treats a company car as a taxable benefit, meaning employees or directors may need to pay Income Tax based on the vehicle’s value and emissions.
Benefit in Kind is calculated using the vehicle’s P11D value and its BiK percentage, which is determined by factors including CO₂ emissions, fuel type and, for some hybrid vehicles, their electric-only driving range. The taxable amount is then multiplied by your Income Tax rate to determine how much tax you’ll pay.
The P11D value is the vehicle’s official list price when new, including VAT, delivery charges and most optional extras. It doesn’t usually include any discounts offered by the dealer. This value is one of the main factors used to calculate your Benefit in Kind tax.
No. Electric company cars are still subject to Benefit in Kind tax, but they typically attract much lower BiK rates than petrol or diesel vehicles. This makes them one of the most tax-efficient choices for businesses and employees.
The employee or company director using the vehicle is responsible for paying Benefit in Kind tax. Employers are also generally required to pay Class 1A National Insurance contributions on company cars provided as a taxable benefit.
A Benefit in Kind calculator provides a quick estimate of the tax you’ll pay on a company car based on its P11D value, CO₂ emissions, fuel type and your Income Tax band. It can help businesses and employees compare different vehicles and make more informed decisions before purchasing or leasing a company car.