Benefit-In-Kind (BIK) is a tax on non-cash benefits provided by employers, such as company cars, medical insurance, or gym memberships. Even though you’re not receiving extra cash, these perks are treated as notional income and taxed accordingly. That means BIK is subject to Income Tax, PRSI, and USC, just like regular pay. If you’re under self-assessment (like many directors or those with additional income), you must report your BIK on your Form 11 each year. Understanding how BIK works is key to avoiding unexpected tax bills.
What Is Taxable Under BIK for Company Cars?
When it comes to company cars, BIK tax is based on the value of the benefit you receive from using the vehicle for personal use. This value depends on the Open Market Value (OMV) of the car, the number of business kilometres driven, and how many weeks per year the car is available to you. Generally, higher-value cars and lower business mileage mean a higher taxable benefit — and that can add up quickly.
Electric Vehicle BIK Exemptions for 2024–2025
There are special BIK reductions for electric vehicles (EVs) to encourage greener travel. If you drive a company EV, you can benefit from a deduction from the Open Market Value (OMV) which lowers your BIK charge. The deduction is €35,000 in 2024 and 2025. If the OMV of your EV falls below these thresholds, no BIK charge may arise. This means some drivers of lower-cost EVs won’t pay any BIK at all during this period.
The Revenue details the rules for benefit-in-kind company cars on their website, or the tax experts at FastTax.ie can help you.
