How is benefit in kind (BIK) calculated on a company car in Ireland for 2024?
Benefit in Kind (BIK) on a company car is a taxable benefit that arises when your employer provides you with a car for private use. The BIK is added to your employment income and taxed under PAYE at your marginal rate.
How BIK on cars is calculated from 2023:
From January 2023, Ireland moved to an emissions-based BIK system that replaced the old mileage-based system. The BIK is calculated as a percentage of the Original Market Value (OMV) of the car, with the percentage determined by the vehicle's CO2 emissions band.
| CO2 Category | Emissions (g/km) | BIK Rate |
|---|---|---|
| A0 | 0g (pure electric) | 9% |
| A1 | 1ā59g | 15% |
| A2 | 60ā99g | 20% |
| A3 | 100ā139g | 25% |
| A4 | 140ā179g | 30% |
| A5 | 180g+ | 35% |
Business mileage driven during the year reduces the BIK rate, with higher business mileage attracting lower percentages within each band.
Example: If your company car has an OMV of ā¬35,000 and emits 120g/km (Category A3, 25% BIK rate), your annual BIK is ā¬8,750. This is added to your taxable income. At the 52% marginal rate (40% income tax + 8% USC + 4% PRSI), the tax cost is approximately ā¬4,550 per year.
Electric vehicles: Pure EVs (0g/km) qualify for a reduced BIK rate of 9%, and there is an OMV reduction of ā¬35,000 for EVs for 2024, further reducing the BIK base. This relief is being tapered each year.
How it is reported: Your employer processes the BIK through payroll and reports it on your P60/End-of-Year Statement. If the wrong amount is applied, you can correct it via Revenue's myAccount.
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