Company cars
The taxable value is the car's list price multiplied by a percentage based on CO2 emissions and fuel type. Electric cars are 4% in 2026/27.
| Car | List price | BIK % | Taxable value | Cost at 40% |
|---|---|---|---|---|
| Electric SUV | £45,000 | 4% | £1,800 | £720/yr |
| Petrol hatchback (120g/km) | £28,000 | 29% | £8,120 | £3,248/yr |
Other benefits
Private medical insurance is taxed on the premium your employer pays. Some benefits are exempt, including workplace pension contributions, a mobile phone, and trivial benefits under £50.
How it's collected
Usually through a reduced tax code. If your employer payrolls benefits, tax is taken from each payslip instead. Employers report benefits to HMRC and pay 15% Class 1A NI on them.
Taxable value is not spending money
A benefit can affect tax without putting its value in your bank account. Compare the tax cost with the benefit's practical value separately from your cash-pay budget.
Try it with your own numbers
Calculate the tax you'll pay on a company car or other benefit in kind for 2026/27, based on your salary and tax band.
Frequently asked questions
Is a company EV worth it?
Often, especially through salary sacrifice. The low BIK rate means the tax is small compared with the cost of leasing privately.
Check it on GOV.UK: Salary sacrifice and the effects on PAYE (opens GOV.UK in a new tab) · Tax on company cars (opens GOV.UK in a new tab)
Sources
Tax year 2026/27. Check these official sources for current rules and deadlines.
Related calculators
- Benefit in Kind Calculator — Calculate the tax you'll pay on a company car or other benefit in kind for 2026/27, based on your salary and tax band.
Related guides
- Salary Sacrifice Explained — How salary sacrifice works for pensions, electric cars and cycle schemes, how much tax and NI you save, and the downsides to check.
- 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.