Company car tax calculator 2026/27
Calculate the benefit-in-kind (BIK) tax on a company car based on its list price, CO2 emissions, and fuel type. See how much the car costs you per month on your payslip.
The manufacturer's list price including options and delivery, minus the first £500 of accessories.
Monthly cost on your payslip
£13
BIK rate: 2% · Taxable benefit: £800/year
Note: This does not include fuel benefit charges. If your employer also provides fuel for private use, an additional BIK charge applies based on the fuel benefit multiplier (£27,800 for 2026/27).
Company car BIK rates 2026/27
The benefit-in-kind percentage determines what proportion of the car's list price is treated as taxable income. Lower-emission vehicles attract significantly lower rates:
| Vehicle type / CO2 | BIK rate |
|---|---|
| Pure electric (0g/km) | 2% |
| PHEV 1-50g/km, 130+ km range | 2% |
| PHEV 1-50g/km, 70-129 km range | 5% |
| PHEV 1-50g/km, 30-69 km range | 8% |
| PHEV 1-50g/km, under 30 km range | 14% |
| 51-54g/km | 15% |
| 55-59g/km | 16% |
| 60-64g/km | 17% |
| 65-69g/km | 18% |
| 70-74g/km | 19% |
| 75-79g/km | 20% |
| 80-84g/km | 21% |
| 85-89g/km | 22% |
| 90-94g/km | 23% |
| 95-99g/km | 24% |
| 100-104g/km | 25% |
| 105-109g/km | 26% |
| 110-114g/km | 27% |
| 115-119g/km | 28% |
| 120-124g/km | 29% |
| 125-129g/km | 30% |
| 130-134g/km | 31% |
| 135-139g/km | 32% |
| 140-144g/km | 33% |
| 145-149g/km | 34% |
| 150-154g/km | 35% |
| 155-159g/km | 36% |
| 160+ g/km | 37% |
Why electric company cars are so attractive
Pure electric vehicles have the lowest BIK rate of just 2%. On a £40,000 electric car, a basic rate (20%) taxpayer pays only £160 per year in BIK tax — that is just £13.33 per month. Compare this to a diesel car with 130g/km CO2 emissions, which at 31% BIK would cost £2,480 per year (£206.67/month at 20% tax).
This makes salary sacrifice schemes for electric cars particularly attractive: you effectively drive a brand new car for a very low monthly cost (often lower than leasing privately), with no NI to pay on the sacrificed amount and minimal BIK tax.
Company car vs car allowance
Many employers offer a choice between a company car and a cash car allowance. A cash allowance is simpler — it is added to your salary and taxed as income. But a company car can be significantly cheaper if you choose a low-emission vehicle:
- Cash allowance £500/month — taxed as income at your marginal rate. A 40% taxpayer keeps £290/month after tax and NI.
- Electric company car (BIK 2%) — on a £45,000 car, a 40% taxpayer pays just £30/month in tax. The employer covers all costs.
The calculation depends on the car's emissions, its list price, your tax rate, and whether the employer covers insurance, maintenance, and fuel. For low-emission vehicles, the company car is almost always better value.
Frequently asked questions
What is the P11D value?
The P11D value is the car's official list price when new, including VAT, delivery charges, and any factory-fitted options. It does not include the first £500 of accessories added after purchase, road tax, or the first registration fee. Second-hand purchase price is irrelevant — HMRC always uses the original list price.
Do I still pay BIK if I barely use the car for personal journeys?
Yes. BIK is charged for the entire period the car is available for your private use — regardless of how much private mileage you actually do. The only way to avoid BIK entirely is to have the car formally unavailable for private use (e.g. kept at the employer's premises with keys surrendered), which is rare and requires strict documentation.
Does the BIK rate change each year?
Yes. The government publishes BIK rates several years in advance. The electric car rate rises by 1 percentage point per year (2% in 2025/26, 2% in 2026/27, 3% in 2027/28, 4% in 2028/29, 5% in 2029/30). This gives employees certainty when choosing a car on a multi-year lease.