Ask PayslipIQ · Last reviewed 2026-05-08
What is a benefit in kind?
A benefit in kind (BIK) is a non-cash benefit your employer gives you, such as a company car, private medical insurance, or a gym membership. The value of the benefit is treated as taxable income, normally collected by adjusting your tax code so HMRC takes the tax through PAYE across the year.
PayslipIQ provides educational information and estimated calculations only. It does not provide tax, legal, financial, payroll, accounting, pension, benefits or employment advice. Always verify your payslip, tax code, deductions and take-home pay with your employer's payroll department, HMRC, your pension provider, a qualified accountant, tax adviser or another appropriately qualified professional.
BIK rules vary by benefit type. A company car's BIK is calculated from the list price, CO2 emissions, and fuel type. Electric vehicles have low BIK percentages, which is why salary sacrifice EV schemes can be efficient.
You can see your reported benefits on your P11D, issued by 6 July each year. The figures should match what your employer told HMRC and what your tax code reflects.
If your tax code dropped sharply, check whether a new BIK has been added. The /tax-code/changed-mid-year page covers the most common causes.
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Reviewed by PayslipIQ Editorial. Sources cited where applicable.
PayslipIQ provides educational information and estimated calculations only. It does not provide tax, legal, financial, payroll, accounting, pension, benefits or employment advice. Always verify your payslip, tax code, deductions and take-home pay with your employer's payroll department, HMRC, your pension provider, a qualified accountant, tax adviser or another appropriately qualified professional.