Company Car Tax Calculator (BIK) – UK
Calculate how much tax you'll pay on your company car benefit. Enter your car's details to see your BIK rate and annual tax bill.
If your employer provides a company car that you can use privately, it counts as a taxable benefit. Known as Benefit-in-Kind (BIK), this additional "income" is added to your salary and taxed accordingly. The amount depends on the car's list price, its CO₂ emissions, and whether you're a basic, higher, or additional-rate taxpayer.
Company car tax can range from negligible for electric vehicles (just 4% of list price in 2026/27) to substantial for high-emission petrol or diesel cars (up to 37%). Many employees are surprised by how much tax they pay on older, less efficient company cars — and how much they could save by switching to an EV or plug-in hybrid.
This calculator uses HMRC's current BIK rates to estimate your tax bill. It accounts for the diesel supplement, electric vehicle rates, and your personal tax band to give you an accurate picture of what that company car actually costs you each month.
Company Car Details
Including extras and delivery, before discounts
Check V5C or manufacturer specs
What this BIK bill really means for your pay
Your company car tax is taken straight out of your monthly pay through PAYE — so a £3,000 annual BIK bill quietly trims around £250 from your take-home each month. The size of the hit comes down almost entirely to CO₂ emissions: a high-emission diesel can be taxed at 37% of its list price, while a pure EV sits at just 4% in 2026/27 (rising to 5% in 2027/28, 7% in 2028/29 and 9% in 2029/30).
If the figure feels heavy, three levers reduce it: switch to a lower-emission or electric car, opt for a cheaper list price, or take a cash allowance instead and run your own car. A salary sacrifice EV scheme often beats a personal lease once you account for income tax and NI savings.
How Benefit-in-Kind Is Calculated
Company car tax (Benefit-in-Kind or BIK) is based on three factors: the car's list price, its CO₂ emissions, and your personal tax rate. HMRC publishes BIK percentages each year that determine what proportion of the car's value counts as a taxable benefit.
The calculation works like this: multiply the car's P11D value by the BIK percentage to get your taxable benefit, then multiply by your income tax rate (20%, 40%, or 45%) to find your annual tax bill. For example, a £30,000 car with a 28% BIK rate creates an £8,400 taxable benefit — costing a basic-rate taxpayer £1,680/year.
Why CO₂ Emissions Matter
High Emissions
170+ g/km = 37% BIK
Maximum rate applies
Medium Emissions
100-120 g/km = 22-27% BIK
Typical petrol car
Zero Emissions
0 g/km = 4% BIK (2026/27)
Electric vehicles
The government uses CO₂-based BIK rates to encourage lower-emission vehicle choices. Each 5g/km reduction in emissions typically lowers your BIK rate by 1 percentage point, directly reducing your tax bill.
Electric Cars and BIK Tax
Electric company cars offer the lowest BIK rates available — just 4% in 2026/27, rising to 5% in 2027/28, 7% in 2028/29 and 9% in 2029/30. This means a £40,000 electric car creates a taxable benefit of only £1,600, costing a basic-rate taxpayer just £320/year (around £27/month).
Compare this to the same priced petrol car at 28% BIK: that's an £11,200 benefit and £2,240/year in tax — over 14 times more expensive. Many employers now offer electric vehicles through salary sacrifice schemes, making them even more tax-efficient as both employee and employer save on National Insurance contributions.
Electric Car BIK Rates
3%
2025/26
4%
2026/27
5%
2027/28
7%
2028/29
9%
2029/30
Frequently Asked Questions
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