Taxable Benefits Calculator
Our taxable benefits calculator works out the income tax and National Insurance you owe on employer-provided benefits in kind (BIKs) — including company cars, private medical insurance, interest-free loans, and living accommodation. Benefits in kind are reported on a P11D form and taxed through your PAYE code the following year, often catching employees by surprise.
Taxable Benefits Calculator
Calculate the tax you owe on company car, medical and other benefits-in-kind for 2026/27.
What Are Taxable Benefits in Kind?
A benefit in kind is any non-cash perk your employer provides. Some benefits are exempt from tax — pension contributions, cycle-to-work schemes up to £1,000, one mobile phone, and certain childcare arrangements. Most others are taxable. Your employer reports these on a P11D form after the end of each tax year, and HMRC adjusts your tax code to collect the tax due.
The most significant BIK for most employees is a company car. The taxable value is based on the car’s list price multiplied by an emissions-based percentage. For a petrol car emitting 120g/km CO2, the BIK rate in 2026/27 is 25% — so a £30,000 car produces a taxable benefit of £7,500, costing a basic rate taxpayer £1,500 in additional income tax per year. Fully electric vehicles attract just 3%, making the BIK charge on a £30,000 EV only £225 for a basic rate taxpayer.
Company Car vs Car Allowance
Many employers offer a choice between a company car and a cash allowance. A cash allowance is taxed as salary, while a company car attracts BIK tax. For high-emission vehicles, a cash allowance is often more tax-efficient. For low-emission or electric vehicles, the company car can be significantly cheaper than buying a car from net pay. Use this calculator to compare the net cost of each option for your specific car choice.
If you use a personal car for business mileage, you can claim HMRC-approved mileage allowances of 45p per mile for the first 10,000 business miles and 25p thereafter — free of income tax and NI. See our Salary Sacrifice Calculator for how electric vehicle salary sacrifice compares to both a company car and a car allowance.
Frequently Asked Questions
If your employer provides free fuel for private use in a company car, the fuel benefit charge is £27,800 multiplied by the same CO2 percentage as the car BIK. For a 25% CO2 car this is £6,950 per year in taxable income — £1,390 in additional tax for a basic rate taxpayer. Given that the fuel benefit charge is fixed regardless of actual fuel usage, it is rarely worth it unless you drive very high private mileage.
The cost of employer-provided private medical insurance is treated as a taxable benefit. If your employer pays a premium of £1,200 per year for your cover, this is added to your taxable income and your tax code is adjusted to collect the tax. A basic rate taxpayer with a £1,200 premium pays £240 extra in income tax per year.
No. Employer pension contributions are one of the most valuable tax-exempt benefits — they do not appear on your P11D and attract no income tax or NI. This makes employer pension contributions far more tax-efficient than equivalent cash salary. Our Pension Calculator shows the long-term impact of employer contributions.
If your employer provides an interest-free or low-interest loan above £10,000, the difference between the HMRC official rate (2.25% in 2026/27) and the rate you pay is treated as a taxable benefit. A £20,000 interest-free loan has a taxable benefit of £450 per year (2.25% of £20,000).
Your employer submits P11D forms by 6 July after each tax year end. HMRC then issues a revised tax code, typically in August or September, which collects the tax through your payroll in monthly instalments over the remainder of the tax year. You do not receive a separate bill.
Enter your salary and then each taxable benefit in kind you receive. Company car BIK is calculated as a percentage of the car’s list price based on CO2 emissions — low-emission and electric vehicles have much lower BIK percentages. Private medical insurance is taxed at its cost to the employer. Interest-free or cheap loans above £10,000 attract a BIK on the difference between the HMRC official rate and any rate charged. Other benefits such as living accommodation, fuel benefit, and some vouchers may also be taxable. The calculator shows the additional income tax you pay on your benefits — importantly, employees pay no National Insurance on benefits in kind. Employers pay Class 1A NI at 15% on the value, which the calculator shows separately for transparency.
Important Information
This calculator is provided for general information and planning purposes only. It does not constitute financial or tax advice and should not be relied upon as such. Figures are indicative estimates based on simplified, publicly available criteria and stated assumptions. Actual results depend on your full circumstances. See our Disclaimer for further information.