Company car BIK in Ireland 2026
If your employer provides you with a car that is available for private use (including your daily commute), Revenue treats this as a Benefit-in-Kind (BIK) — a taxable non-cash benefit. The value is added to your salary and you pay Income Tax, USC and PRSI on it through payroll.
How BIK is calculated on a company car
Since 1 January 2023, company car BIK is calculated based on three factors: the car's Original Market Value (OMV), its CO₂ emissions band, and the annual business kilometres driven. The formula is:
Taxable BIK = Adjusted OMV × BIK % rate
Where Adjusted OMV = OMV minus applicable reliefs
2026 CO₂ bands and BIK rates
| Business km / yr | A1 (EV, 0g) | A (1–59g) | B (60–99g) | C (100–139g) | D (140–179g) | E (180g+) |
|---|---|---|---|---|---|---|
| 0–26,000 | 15% | 22.5% | 26.25% | 30% | 33.75% | 37.5% |
| 26,001–39,000 | 12% | 18% | 21% | 24% | 27% | 30% |
| 39,001–48,000 | 9% | 13.5% | 15.75% | 18% | 20.25% | 22.5% |
| 48,001+ | 6% | 9% | 10.5% | 12% | 13.5% | 15% |
2026 OMV reductions
- Universal reduction (categories A1–D + vans): €10,000 off OMV in 2026, tapering to €5,000 in 2027 and €2,500 in 2028
- EV-specific reduction (A1 only): additional €20,000 off OMV in 2026, €10,000 in 2027
- Total EV relief in 2026: €30,000 off OMV (€10,000 + €20,000)
- Category E vehicles: no OMV reduction applies
Van BIK
A flat rate of 8% of the van's OMV applies for all vans regardless of CO₂ emissions or mileage. The €10,000 universal OMV reduction also applies to vans in 2026.
How to reduce your BIK
- Drive more business kilometres — higher mileage moves you into a lower BIK band
- Choose a lower-emission vehicle — Category A1 (EV) rates are significantly lower than diesel/petrol
- Make documented employee contributions toward the car's running costs — these directly reduce the taxable benefit
- Keep a detailed mileage log — Revenue requires evidence of business kilometres
- Consider whether a cash allowance may be more tax-efficient for your circumstances