Company Car BIK Calculator

Estimate company-car Benefit-in-Kind tax for 2026/27 from vehicle details and your selected marginal Income Tax rate.

Sample inputs active: £45,000 P11D electric car, 130-mile range, rUK 40% marginal rate, no employer-provided private fuel. Edit any field to model your car.

Estimated company-car tax · 2026/27

Based on a 40% marginal rate for England, Wales or Northern Ireland; personal Income Tax banding is not calculated.

Appropriate percentage

Taxable car benefit

£1,800.00

Annual car BIK tax

£720.00

Monthly car BIK tax

£60.00

Employer Class 1A NI estimate: £270.00.

Taxable benefit and estimated tax

Separate annual values derived from the same BIK calculation.

Annual benefit and tax values
Measure	Amount
Taxable car benefit	£1,800.00
Employee tax on car	£720.00
Employer Class 1A NI	£270.00

Annual employee tax by marginal rate

Same £1,800.00 car benefit; tax bands are not inferred from salary.

Annual tax sensitivity
Measure	Amount
20%	£360.00
40%	£720.00
45%	£810.00
60%	£1,080.00

Company-car BIK tax by tax year

Same vehicle and marginal rate, applying each published year’s appropriate percentage; private fuel excluded from this trend.

Tax-year projection
Measure	Amount
2025/26	£540.00
2026/27	£720.00
2027/28	£900.00

How this estimate works and what it excludes

The selected marginal rate is applied to the whole benefit, so a benefit that crosses a tax-band boundary may be taxed differently in payroll. Salary, Personal Allowance, pension and other income affect the actual rate; the calculator does not derive it. This page models the company-car benefit and optional private-fuel benefit, not full PAYE, employee NI, salary-sacrifice affordability, car running costs or a vehicle recommendation. It excludes employee payments, capital contributions, part-year availability, special registration-cycle CO₂ conversions and bespoke payroll circumstances. Check your P11D and HMRC calculation.

Edited inputs are written to this page's URL, which may appear in browser history; avoid sharing it if those figures are private. Reset removes this calculator's URL values. Saved inputs are used only when functional-storage consent is enabled.

Website updated 10 October 2026.

Key takeaways

BIK depends on CO₂

The BIK percentage is set by your car's CO₂ emissions. Electric cars at 4% are generally lower than petrol or diesel cars, which can reach 37%.

Fuel benefit adds tax

If your employer covers all private fuel, the fuel benefit charge can add thousands to your taxable income.

EVs can produce a lower modelled BIK cost

A lower BIK percentage does not by itself establish a lower total cost. P11D value, selected marginal rate and employer terms affect the estimate; this page does not compare vehicle running costs.

Worked examples

⚡ Electric company car (illustration)

P11D: £50,000

BIK rate: 4% (0 g/km CO₂, 2026/27)

Taxable benefit: £2,000

Tax at 40%: £800/year (£66.67/month)

⛽ Diesel company car (illustration)

P11D: £42,000

BIK rate: 35% for the supplied 128 g/km input, including the non-RDE2 supplement

Taxable benefit: £14,700

Tax at 40%: £5,880/year (£490/month)

🚗 Petrol/hybrid company car (illustration)

P11D: £28,000

BIK rate: 26% (102 g/km CO₂)

Taxable benefit: £7,280

Tax at 20%: £1,456/year — at 40%: £2,912/year

Worked examples use the named P11D and current-year appropriate percentage, before employee contributions or payroll adjustments. Diesel's 4-point supplement is capped at 37%. Confirm the correct marginal rate, CO₂ figure and RDE2 status before relying on an estimate.

P11D value and the taxable benefit base

BIK is calculated using the car's P11D value — the list price including VAT, delivery fees, and most optional extras. The taxable benefit is the P11D value multiplied by the BIK percentage for your car's CO₂ band.

Taxable benefit ≈ P11D value × BIK percentage

The estimate uses the unadjusted P11D value. Employee capital contributions, private payments, part-year availability and payroll adjustments are not included; check treatment with your employer and HMRC.

CO₂ emissions and the BIK percentage

The BIK percentage is set by HMRC based on the car's WLTP CO₂ emissions. Lower emissions mean a lower BIK rate:

Electric cars (0 g/km): 4% for 2026/27
Plug-in hybrids: from 16% (<30 miles) to 4% (130+ miles) for 2026/27
Petrol/diesel: from 17% (51–54g/km) to 37% (155g/km and above)

Diesel cars not meeting RDE2 standards pay an additional 4% supplement, capped at the maximum 37%.

Electric cars and BIK rate changes

Electric cars have the lowest BIK rate. The rate is scheduled to rise gradually:

2025/26: 3%
2026/27: 4%
2027/28: 5%

The percentage alone does not determine which vehicle costs less: P11D price, marginal Income Tax rate, use and employer terms also matter. The projection above applies the appropriate percentage to this page's current inputs.

Fuel benefit charge (if employer pays for private fuel)

If your employer pays for all private fuel, you pay additional tax on the car fuel benefit. For 2026/27:

Fuel benefit charge = £29,200 × BIK percentage

For example, a petrol car at 30% BIK adds £8,760 to your taxable income before applying the employee's tax rate. Reimbursing the employer for all private fuel may prevent a separate fuel benefit where the relevant conditions and timing requirements are met.

Practical tip

Private fuel charges have specific all-or-nothing rules and reimbursement conditions. Check the current HMRC guidance and your employer's payroll treatment before making a reimbursement.

Diesel supplement (RDE2 compliance)

Diesel cars that do not meet the Real Driving Emissions 2 (RDE2) standard pay an additional 4% BIK supplement on top of the normal CO₂-based percentage, capped at 37%.

Registration date alone does not establish compliance. Check the vehicle documentation or ask the manufacturer or fleet provider; the calculator lets you state whether the vehicle meets RDE2.

Van BIK (flat rate)

Vans have a standard benefit charge of £4,170 for 2026/27, subject to the restricted-private-use and zero-emission rules. It is not calculated from the car BIK percentage.

If private use of the van is restricted (e.g., only for commuting and insignificant personal use), it may qualify for the "restricted private use" exemption — meaning no BIK charge.

Capital and private contributions

This estimate does not include employee contributions. HMRC treats contributions differently depending on their purpose and facts:

Capital contributions towards the car's cost may reduce the benefit value, subject to statutory limits and conditions.
Payments for private fuel may affect a separate fuel benefit only when the relevant rules and timing conditions are met.
Running-cost payments are not automatically deducted from the P11D value.

Confirm with your employer how contributions are handled in your payroll — the treatment can vary.

Company car vs car allowance (scenario checklist)

This BIK estimate does not model these comparisons. If you compare offers separately, check:

Keep salary constant and change only one benefit at a time
Include the fuel benefit charge if your employer pays for private fuel
Factor in employer NI — the employer's Class 1A result depends on the taxable benefit and the cash-allowance arrangement
Whether an optional-remuneration arrangement applies and whether the car's emissions meet an exception
Validate against your payslip if you already receive a car or allowance

Recommended next steps

Use these tools and guides to validate assumptions and compare your wider compensation package.

Salary Calculator

Baseline take-home pay estimate before adding benefits.

Salary Sacrifice Calculator

Estimate how salary sacrifice affects your net pay and NI savings.

EV vs Petrol Cost

Compare total ownership costs for electric and petrol cars.

Company car BIK FAQs

What is BIK tax on company cars?

Benefit-in-Kind (BIK) is tax you pay when your employer provides a company car for private use, including ordinary commuting. It is based on the car's P11D value multiplied by an appropriate percentage determined by CO₂ emissions and fuel type, then taxed at your marginal Income Tax rate.

How much is BIK on electric cars 2026/27?

For 2026/27, the appropriate percentage for a zero-emission company car is 4%. The rate is 3% for 2025/26 and 5% for 2027/28, subject to the vehicle and tax-year rules.

How is BIK calculated on a company car?

BIK is generally based on the P11D value, the applicable appropriate percentage and your tax rate, with relevant employee contributions or availability adjustments where applicable. The calculator is a simplified estimate and does not determine every payroll adjustment.

What is the BIK on a petrol car 2026/27?

For 2026/27, the appropriate percentage is based on the car's WLTP CO₂ band: it ranges from 17% at 51–54g/km to 37% at 155g/km and above. Diesel cars that do not meet RDE2 standards can have a 4 percentage-point supplement, capped at 37%.

Does this calculator tell me whether a company car is worth it?

No. It estimates company-car BIK tax from the P11D value, vehicle details and a marginal Income Tax rate you select. It does not compare company car costs with personal leasing, buying, a cash allowance or salary sacrifice.

What is the BIK on hybrid company cars?

For 2026/27, a plug-in hybrid with 1–50g/km CO₂ is assessed by electric range: 4% at 130 miles or more, 7% at 70–129 miles, 10% at 40–69 miles, 14% at 30–39 miles, and 16% below 30 miles.

What is the fuel benefit charge?

If your employer provides private fuel, you pay an additional tax charge based on the official car-fuel multiplier multiplied by the car's BIK percentage. For 2026/27, the multiplier is £29,200. The charge is separate from the car benefit and depends on whether private fuel is provided and the relevant reimbursement conditions are met.

What is the diesel supplement?

Diesel cars not meeting RDE2 real driving emissions standards can have an additional 4% BIK surcharge. Check the vehicle documentation and HMRC rules rather than assuming a registration year proves the emissions standard.

What happens to BIK when I contribute privately?

An employee contribution toward the car can reduce the taxable benefit where the relevant conditions apply. The treatment depends on what the payment is for and the applicable rules, so do not assume every running-cost payment reduces the P11D value.

Does this calculate salary sacrifice savings?

No. Salary sacrifice can change taxable pay and the car benefit under optional-remuneration rules. This estimate does not calculate payroll, employee National Insurance savings, minimum-wage restrictions or employer scheme terms.

What is the company-car BIK for vans?

Vans have separate benefit rules. For 2026/27, the standard van benefit charge is £4,170. It can be £0 where private use is restricted to ordinary commuting and insignificant private use, or for a zero-emission van under the applicable rules. Check the vehicle and private-use facts with HMRC or payroll.

Do I pay National Insurance on company-car BIK?

Employees do not normally pay employee National Insurance on the company-car benefit itself, while employers pay Class 1A National Insurance on taxable benefits. For 2026/27 the Class 1A rate is 15%, subject to the employer rules.

Public resources and official sources

These official HMRC and GOV.UK sources support the company-car BIK, fuel-benefit, van, salary-sacrifice and National Insurance explanations.

GOV.UK: Tax on company cars
Private-use, P11D, emissions and electric-range rules.
GOV.UK: Company-car appropriate percentages
Official petrol and hybrid company-car percentages for 2026/27.
GOV.UK: Car and van fuel benefit charges 2026/27
Car-fuel multiplier and van benefit charge.
GOV.UK: Optional remuneration arrangements
Salary-sacrifice and OpRA valuation rules.
GOV.UK: employer National Insurance rates 2026/27
2026/27 employer Class 1A rate and employee NI context.
GOV.UK: Income Tax rates and allowances 2026/27
Published Income Tax rate context for 2026/27; this calculator asks users to choose a marginal rate.
Scottish Government: Income Tax ready reckoner 2026/27
Scottish non-savings, non-dividend Income Tax rates and bands.
GOV.UK: advisory fuel rates
Current petrol, diesel and electric advisory mileage rates; these can change quarterly.

Loading Tools

Annual benefit and tax values

Measure

Amount

Taxable car benefit

£1,800.00

Employee tax on car

£720.00

Employer Class 1A NI

£270.00

Annual tax sensitivity

Measure

Amount

20%

£360.00

40%

£720.00

45%

£810.00

60%

£1,080.00

Tax-year projection

Measure

Amount

2025/26

£540.00

2026/27

£720.00

2027/28

£900.00

How this estimate works and what it excludes

Website updated 10 October 2026.

Key takeaways

BIK depends on CO₂

The BIK percentage is set by your car's CO₂ emissions. Electric cars at 4% are generally lower than petrol or diesel cars, which can reach 37%.

Fuel benefit adds tax

If your employer covers all private fuel, the fuel benefit charge can add thousands to your taxable income.

EVs can produce a lower modelled BIK cost

A lower BIK percentage does not by itself establish a lower total cost. P11D value, selected marginal rate and employer terms affect the estimate; this page does not compare vehicle running costs.

Worked examples

⚡ Electric company car (illustration)

P11D: £50,000

BIK rate: 4% (0 g/km CO₂, 2026/27)

Taxable benefit: £2,000

Tax at 40%: £800/year (£66.67/month)

⛽ Diesel company car (illustration)

P11D: £42,000

BIK rate: 35% for the supplied 128 g/km input, including the non-RDE2 supplement

Taxable benefit: £14,700

Tax at 40%: £5,880/year (£490/month)

🚗 Petrol/hybrid company car (illustration)

P11D: £28,000

BIK rate: 26% (102 g/km CO₂)

Taxable benefit: £7,280

Tax at 20%: £1,456/year — at 40%: £2,912/year

Company car BIK FAQs

What is BIK tax on company cars?

How much is BIK on electric cars 2026/27?

For 2026/27, the appropriate percentage for a zero-emission company car is 4%. The rate is 3% for 2025/26 and 5% for 2027/28, subject to the vehicle and tax-year rules.

How is BIK calculated on a company car?

What is the BIK on a petrol car 2026/27?

Does this calculator tell me whether a company car is worth it?

What is the BIK on hybrid company cars?

For 2026/27, a plug-in hybrid with 1–50g/km CO₂ is assessed by electric range: 4% at 130 miles or more, 7% at 70–129 miles, 10% at 40–69 miles, 14% at 30–39 miles, and 16% below 30 miles.

What is the fuel benefit charge?

What is the diesel supplement?

What happens to BIK when I contribute privately?

Does this calculate salary sacrifice savings?

What is the company-car BIK for vans?

Do I pay National Insurance on company-car BIK?