How Benefit In Kind (BIK) Tax Is Calculated

What is Benefit in Kind?

Benefit in Kind (BIK) is a tax that employees must pay when they receive a benefit from their employer that is not included in their salary — such as a company car available for private use. This is often is referred to as Company Car Tax.

he BIK cost for each vehicle is determined by a range of factors;

The P11D value of the vehicle (its list price including VAT and optional extras)
The vehicle’s CO₂ emissions
The employee’s income tax bracket (e.g. 20%, 40%)

The higher the vehicle’s emissions, the higher the BIK percentage will be, which you can find in the table below. This has been introduced to encourage the use of lower-emission and electric vehicles.

How BIK is Calculated

Car CO2 emissions are a measure of how much carbon dioxide your vehicle emits, given in grams per kilometre (g/km). This number helps gauge how environmentally friendly your car is; the lower the emissions, the cleaner the vehicle.

All these numbers allow you to work out how much it could cost you to lease a car.

Vehicle value (P11D) x BIK tax (%) x tax bracket (%) ÷ 12 = Monthly cost of BIK (£)

Vehicle Value (P11D): The list price of the car.

BIK Percentage: Percentage based on CO2 emissions.

Tax Bracket: Your income tax rate (e.g. 20%, 40%).

Benefit in Kind (BIK) CO₂ Bands by Tax Year g/km (Registered from April 2020)

The Benefit In Kind table below shows the company car tax % based on CO2 emissions.

The BIK bands are set by HMRC and are based on a vehicle's CO2 emissions. A rate applies to electric or alternative fuel cars that emit zero CO2 emissions - check here.

If you drive a plug-in hybrid car that emits less than 50g/km, the rate is based on the battery zero-emissions range. This is the distance (measured in miles) the car/van can go on electric power before its batteries need recharging.

CO2 (g/km)	Electric range (miles)	2024/25 (%)	2025/26 (%)	2026/27 (%)	2027/28 (%)	2028/29 (%)	2029/30 (%)
0	N/A	2	3	4	5	7	9
1-50	>130	2	3	4	5	18	19
1-50	70-129	5	6	7	8	18	19
1-50	40-69	8	9	10	11	18	19
1-50	30-39	12	13	14	15	18	19
1-50	<30	14	15	16	17	18	19
51-54		15	16	17	18	19	20
55-59		16	17	18	19	20	21
60-64		17	18	19	20	21	22
65-69		18	19	20	21	22	23
70-74		19	20	21	21	22	23
75-79		20	21	21	21	22	23
80-84		21	22	22	22	23	24
85-89		22	23	23	23	24	25
90-94		23	24	24	24	25	26
95-99		24	25	25	25	26	27
100-104		25	26	26	26	27	28
105-109		26	27	27	27	28	29
110-114		27	28	28	28	29	30
115-119		28	29	29	29	30	31
120-124		29	30	30	30	31	32
125-129		30	31	31	31	32	33
130-134		31	32	32	32	33	34
135-139		32	33	33	33	34	35
140-144		33	34	34	34	35	36
145-149		34	35	35	35	36	37
150-154		35	36	36	36	37	38
155-159		36	37	37	37	38	39
160-164		37	37	37	37	38	39
165-169		37	37	37	37	38	39
170+		37	37	37	37	38	39

Is The BIK Rate The Same For Cars And Vans?

No, there are different calculations for cars, vans and pickups. Learn more about BIK for vans and cars on the pages below

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