## What BIK is
Benefit in Kind is the taxable value of any non cash benefit provided by an employer. The most common BIK is the company car, but it also includes vans, accommodation, loans, and medical insurance paid by the employer.
BIK is added to gross pay for tax calculation. PAYE, USC, and PRSI are charged on the notional value, even though no cash actually changes hands.
## Car BIK calculation 2026
The BIK on a company car is a percentage of the Original Market Value (OMV). The percentage depends on:
- CO2 emissions category
- Annual business mileage
| CO2 category | Emissions g/km | Low business mileage rate | High business mileage rate (over 48,000 km) |
| --- | --- | --- | --- |
| A | 0 to 59 | 22.5 percent | 9 percent |
| B | 60 to 99 | 26.25 percent | 10.5 percent |
| C | 100 to 139 | 30 percent | 12 percent |
| D | 140 to 179 | 33.75 percent | 13.5 percent |
| E | 180+ | 37.5 percent | 15 percent |
## Electric vehicle relief
For electric cars, an OMV reduction of €10,000 applies in 2026 (down from earlier years' relief), helping employers move toward EV fleets.
## Worked example, petrol car
Conor has a company car with OMV €30,000, CO2 category C, low business mileage.
- BIK rate: 30 percent
- Annual BIK: €30,000 x 30 percent = €9,000
This €9,000 is added to his gross pay for tax purposes. At 40 percent PAYE plus 8 percent USC plus 4.1 percent PRSI:
- Tax cost: €9,000 x (40 + 8 + 4.1) percent = €4,689 per year
## Worked example, EV with relief
Sinead has an electric company car with OMV €40,000, low business mileage.
- OMV after €10,000 relief: €30,000
- BIK at 22.5 percent (Category A) = €6,750
- Tax cost at 52 percent marginal: approximately €3,510
The EV relief makes a significant difference, although the gap has narrowed compared with earlier years.
## Worked example, high business mileage
Padraic drives 60,000 km annually for sales. Same car as Conor (OMV €30,000, Category C).
- BIK rate: 12 percent (high mileage band)
- Annual BIK: €30,000 x 12 percent = €3,600
His tax cost is far lower because of the mileage band.
## Mileage thresholds
The full mileage band table (used for low emission vehicles):
| Annual business km | Reduction factor |
| --- | --- |
| 0 to 26,000 | Full BIK |
| 26,001 to 39,000 | Reduced |
| 39,001 to 48,000 | Reduced further |
| Over 48,000 | Lowest band |
## Employee contribution
If the employee contributes toward the cost of the car, the BIK can be reduced by the contribution. Employers must apply this carefully.
## Van BIK
A company van has a flat BIK of 8 percent of OMV in 2026, regardless of CO2 or mileage, provided private use is incidental.
## Educational notice
BIK rules are detailed. Always consult Revenue.ie's manual on BIK or a qualified tax adviser for specific situations.