Benefit in Kind Tax Calculator
Benefits like company cars and private medical cover are taxed as if they were extra income. Enter the car's list price and BIK percentage, or the cash value of another benefit.
Tax year 2026/27 · Estimates, not personal tax advice
EVs: 4% in 2026/27. A custom percentage stays unchanged when you change year.
Benefit in kind tax
£26.67 a month
| Taxable benefit | £1,600.00 |
| Your extra Income Tax | £320.00 |
| Employer Class 1A NI (paid by employer) | £240.00 |
Rates and rules used
Tax year 2026/27Default year 2026/27 (6 April to 5 April). 2025/26 and 2024/25 figures are kept for comparison where the calculator offers a year choice.
- Company car benefit-in-kind percentages2026/27GOV.UK: Tax on company cars (opens in new tab)
- Income Tax bands, rates and Personal Allowance2026/27GOV.UK: Income Tax rates and allowances (opens in new tab)
Independent site, not affiliated with HMRC. Always check GOV.UK for the latest figures.
How this calculation works
- 01Multiply the car's list price by its BIK percentage (or use the cash value of another benefit).
- 02Add that to your taxable income.
- 03The extra Income Tax is the cost to you.
Real payroll can differ because tax and NI are worked out per pay period, and your tax code may include adjustments HMRC hasn't told you about. See our methodology.
Electric cars
Fully electric cars have a BIK rate of 4% in 2026/27, rising by a point each year to 2028. A £40,000 EV creates a £1,600 benefit, costing a basic-rate taxpayer £320 a year.
Understanding your benefit in kind calculator result
A taxable benefit adds a cash-equivalent amount to income even though it is not paid as salary. The result estimates the employee's Income Tax on that value; it does not treat the full benefit value as cash received.
Comparing a company car with cash allowance
Scenario: For a car, enter its taxable list price and the official percentage. Compare the tax cost with the net value of any cash allowance offered instead.
How to use the result: A low taxable percentage can make the car attractive, but fuel, contribution and availability rules can change the result. Compare the same period and include any employee payment.
Details to check before relying on the estimate
- Use the official taxable value rather than the employer's purchase price.
- Private fuel can create a separate benefit.
- A benefit may be payrolled or collected through the tax code.
Putting the estimate into perspective
Compare the benefit's tax cost with the practical value it gives you. Its taxable value is not cash received, so it should not simply be added to your monthly spending budget.
Frequently asked questions
How is benefit in kind collected?
Usually through your tax code, which is reduced by the value of the benefit. Some employers payroll benefits instead.
Check it on GOV.UK: Tax on company cars (opens GOV.UK in a new tab)
Which benefits count as a benefit in kind?
Typical examples are a company car, private medical insurance and some low-interest loans. Some benefits are exempt, so check the rules for the specific benefit you receive.
Check it on GOV.UK: Tax on company cars (opens GOV.UK in a new tab)
Does my employer tell me the value of a benefit?
Employers report benefits to HMRC, often on a P11D. The value affects your tax code, so compare it with your employer's figure.
Check it on GOV.UK: Tax codes (opens GOV.UK in a new tab)
Related calculators
- Salary Sacrifice Calculator — Model the cash-pay reduction used to obtain a benefit.
- Salary Calculator — See how the taxable value affects complete take-home pay.
- PAYE Calculator — Understand a tax-code adjustment for the benefit.
Related guides
- Benefits in Kind — How benefits in kind are taxed, from company cars to private medical insurance, and how to work out the cost to you.
- Tax Codes Explained — What your tax code means, from 1257L to K codes, BR, D0, NT and emergency codes, and what to do if yours looks wrong.