Calculating BIK for Company Cars

At Jensen Fleet we aim to make managing your company fleet easier. This handy guide will help you to calculate the BIK due from each employee on their company car.

The BIK on a company car relates to the private use of the car by the employee, the cash benefit is calculated from the original market value (OMV) of the car. The OMV is the list price of the vehicle including the VAT and VRT at time of first registration. The percentage used to determine the total cash benefit depends on the total number of kilometres of business travel for the year, and (for cars first released in 2009 and onwards) the CO2 emissions of the car.

For older cars, from before 2009, the annual cash benefit for the use of the company car is calculated at 30% of the OMV of the car.

Business Mileage from 2009 and all subsequent periods:

  • 0 – 24,000 Km – 30%
  • 24,001 – 32,000 – 24%
  • 32,001 – 40,000 – 18%
  • 40,001 – 48,000 – 12%
  • 48,001 + – 6%

Example Calculation

Employees can contribute towards there running cost of their company car and in doing so can reduce their benefit in kind payments this does not apply however to motor tax and insurance for example servicing & personal mileage contribution.

For a car with an OMV of €30,000 and business km of 25,000, Category A:

Cash benefit = €30,000 x 24% = €9,000

If the employee contributed €1,000 towards the running cost of the car then the cash benefit would be as follows:

  • €30,000 x 24% = €7,200
  • Less contribution = (€1,000)
  • Nominal Pay = €6,200

Commercial Vehicles

All commercial vehicles are exempt from benefit in kind where the below rules are followed:

  • The vehicle is used for the purpose of the employees work
  • The employer requires the commercial vehicle to be brought home
  • The employee spends most of his/her time working away from the office

Where any of the above conditions are not met a 5% Benefit in Kind should be applied.

For more information on the vehicles we can provide please contact Jensen Fleet Solutions on 01-4605250 or info@jensenfleet.ie