Guide · BIK Calculator
BIK Calculator Ireland — company car tax guide 2026
The TakeHomePay.ie BIK calculator estimates the extra income tax, USC and PRSI you pay when your employer provides a company car or van for private use. Benefit-in-Kind (BIK) is a taxable non-cash benefit — Revenue adds a "cash equivalent" value to your income and you pay tax on it through payroll, just like salary.
Since 2023, Irish company car BIK has been calculated using a new system based on three factors: the car's Original Market Value (OMV), its CO₂ emissions band, and the number of business kilometres you drive annually. The 2026 rules also introduced a dedicated new A1 category for electric vehicles with significantly lower rates and larger OMV reductions.
Tab 1 — Company Car BIK
The Company Car tab calculates your estimated extra annual tax cost from a company car benefit. Enter the four fields below:
The Original Market Value is the retail price of the car in Ireland at the time of its first registration — including all Irish taxes (VRT and VAT). It is the list price, not the price you or your employer negotiated or paid. You can find the OMV on the Vehicle Registration Certificate or from the manufacturer's Irish price list. SEAI grants for EVs are not deducted from the OMV for BIK purposes.
Select the CO₂ category that matches your car. You can find the CO₂ emissions figure on the Vehicle Registration Certificate (VRC), your insurance documents, or the manufacturer's specification sheet. The band determines your BIK percentage rate — lower emissions mean a lower rate. You can also tap the CO₂ band cards on the left side of the calculator to select your category directly.
The number of kilometres you drive for business purposes only each year. Your daily commute between home and your regular workplace is private mileage — not business mileage. Only travel from your workplace to client sites, between different business locations, or to approved temporary workplaces qualifies. Revenue can and does request mileage records — keep a detailed log.
If you make qualifying employee contributions — typically a fixed periodic payment directly to your employer toward the use of the car — enter the annual total here. Certain qualifying contributions can reduce the taxable BIK value before tax is calculated. Check Revenue guidance on the types of contributions that qualify, as not all payments automatically reduce the BIK value.
Enter your gross annual salary. This is used to determine which USC band your BIK falls into — an important distinction from simpler calculators that apply a flat USC rate. The BIK is effectively stacked on top of your salary for USC purposes: if your salary of €70,000 already pushes you into the 8% USC band, any BIK on top of that is also taxed at 8% USC, not 3%.
Select 20% or 40% — whichever income tax rate applies to your income at the margin. BIK is taxed at your highest rate of income tax. Most employees with a company car will be in the 40% band, but select 20% if your total income (salary + BIK) stays within the standard rate cut-off.
CO₂ bands and BIK rates 2026
Ireland uses six CO₂ emission categories to set BIK rates. Within each category, the rate also depends on how many business kilometres you drive — more business mileage means a lower BIK rate.
The full rate table (showing all four mileage bands for each CO₂ category) is displayed inside the calculator and highlights your specific band automatically.
Mileage bands
| Annual business km | A1 (EV) | A | B | C | D | E |
|---|---|---|---|---|---|---|
| 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% |
Your commute does not count. Only genuine business kilometres (excluding home-to-office commuting) count toward your mileage band. Inflating business mileage figures to achieve a lower BIK rate is a Revenue compliance risk — keep accurate mileage records.
OMV reductions — how they reduce your BIK
Before applying the BIK percentage rate, Revenue allows a deduction from the car's OMV. This "adjusted OMV" is the figure the BIK rate is applied to — reducing it directly reduces your taxable benefit.
- Universal reduction (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, reducing to €10,000 in 2027 and zero in 2028
- Total EV relief in 2026: €30,000 off OMV — making EVs by far the most tax-efficient company car choice
- Category E (180g+ CO₂): no OMV reduction at all
The OMV reduction tapering matters if you're choosing between a petrol/diesel car and an EV. The €30,000 EV reduction drops to €15,000 in 2027 and €2,500 in 2028. If your employer is providing a new company car and you have the choice, 2026 is the most tax-efficient year to choose an EV.
Worked examples
Example 1 — Category C petrol car, moderate mileage
OMV €35,000 · Cat C (120 g/km) · 24,000 km/yr · Salary €60,000 · 40% rate
Example 2 — Electric vehicle (A1), same salary
OMV €45,000 · Cat A1 (EV, 0 g/km) · 24,000 km/yr · Salary €60,000 · 40% rate
EVs are dramatically more tax-efficient in 2026. The same salary and similar mileage profile produces a tax bill of €1,063 for an EV versus €3,543 for a Category C petrol car — a saving of €2,480/year, or over €200/month. This gap will narrow from 2027 as the EV-specific OMV relief tapers down.
Tab 2 — Van BIK
The Van tab calculates BIK on a company van. Van BIK works differently from cars — it uses a flat rate of 8% of the van's OMV, regardless of CO₂ emissions or business mileage. The universal €10,000 OMV reduction also applies to vans in 2026.
Van OMV €30,000 · Salary €55,000 · 40% tax rate
Van BIK exemption: If a van is used only for business travel and you are required to bring it home at night (e.g. you are an on-call technician), Revenue may allow an exemption from BIK. The van must not be used for private journeys other than travel between home and work in specific circumstances. This is a nuanced area — seek payroll or tax advice if you believe you may qualify.
Tab 3 — Car vs Cash Allowance
Many employers offer a choice between a company car and a cash car allowance. The comparison tab helps you decide which is financially better for your situation.
Company car: you pay tax only on the BIK value — typically significantly less than the full cash value of the benefit. However, the comparison measures tax only. The economic value depends on what the company car includes — fuel, insurance, servicing, tyres — versus having to fund these yourself from a cash allowance.
Cash allowance: taxed as salary — you pay income tax, USC and PRSI on the full amount, then use the net amount to fund your own car and all running costs.
Enter the gross annual cash allowance your employer is offering as an alternative to the company car. The calculator will show the after-tax value of the allowance versus the after-tax cost of the car's BIK, and tell you which option leaves you better off.
The car vs allowance comparison only covers the tax cost — not the full picture. With a company car, your employer typically covers fuel, insurance, servicing and tyres. With a cash allowance, you cover all running costs yourself. Make sure to factor in total motoring costs — not just the tax — before deciding. The calculator gives the tax comparison; the real-world decision requires knowing your actual running costs.
How to reduce your company car BIK tax
Moving up a mileage band significantly reduces your BIK rate. For a Category C car, moving from 0–26,000 km (30% rate) to 26,001–39,000 km (24% rate) saves 6 percentage points on the adjusted OMV — on a €25,000 adjusted OMV that's €1,500 less taxable benefit. Keep accurate records to justify every business kilometre claimed.
Selecting an EV (Category A1) versus a Category C or D car reduces the BIK rate and attracts an additional €20,000 OMV reduction in 2026. This is the single biggest lever available — as the worked examples above show, it can cut the annual tax bill by over €2,000.
Certain qualifying payments made directly to your employer toward the use of the car can reduce the taxable BIK value. Check Revenue guidance on which contributions qualify — not all payments automatically reduce the BIK amount. Where qualifying contributions apply, they are deducted from the taxable benefit before tax is calculated.
Revenue can request evidence of your business mileage. A contemporaneous log (date, journey, purpose, km) is far more defensible than reconstructed records. Many employees under-claim business mileage because they don't log it — ensuring your records are accurate could move you into a lower BIK band.
Revenue sources & official guidance
The BIK rules used in this calculator are based on the following Revenue publications. These are the authoritative sources for Irish company car and van BIK treatment:
- Revenue — BIK on company cars (CO₂ bands, OMV reductions, 2026 rates)
- Revenue — BIK on company vans (flat 8% rate, exemption conditions)
- Revenue Tax and Duty Manual — BIK (detailed employer guidance)
- Revenue — Benefit-in-Kind overview for employers
BIK rates and OMV reductions are reviewed annually. The figures in this calculator reflect the 2026 rules effective from 1 January 2026. Always verify current rules with Revenue or a qualified payroll adviser before making vehicle or compensation decisions.
Frequently asked questions
What is Benefit-in-Kind (BIK) on a company car in Ireland?
BIK is a taxable non-cash benefit. When your employer provides a car available for private use (including your commute), Revenue treats a "cash equivalent" value as part of your income. That value — the BIK — is added to your salary and taxed through PAYE, USC and PRSI. The BIK is calculated using the car's OMV, its CO₂ band and how many business kilometres you drive annually.
Does my commute count as business mileage?
No. Travel between your home and your regular place of work is treated as private mileage for BIK purposes. Only travel from your regular workplace to a client site, between business locations, or to a bona fide temporary workplace counts as business mileage. This is one of the most common misconceptions around company car BIK — your effective mileage band may be lower than you think if most of your driving is commuting.
What is the OMV of a car?
The Original Market Value is the full retail price of the car in Ireland at the time of its first registration, including all Irish taxes (VRT and VAT). It is not the price your employer paid, the current market value of the car, or the price reduced by any negotiated discount. For EVs, SEAI grants do not reduce the OMV for BIK purposes — Revenue confirmed this explicitly.
Why does the BIK calculator need my salary?
The calculator uses your salary to determine which USC band your BIK falls into. BIK is effectively added on top of your salary for USC purposes. If your salary of €72,000 already exceeds the €70,044 threshold for the 8% USC band, your BIK will also be taxed at 8% USC — not 3%. Using a flat USC rate (as some simpler calculators do) can significantly understate the real tax cost for higher earners.
Is the BIK rate different for an electric company car?
Yes — significantly so. From 1 January 2026, EVs have their own dedicated Category A1 with rates from 6% to 15% depending on business mileage. This compares with rates of 22.5%–37.5% for the highest-emission Category E vehicles at equivalent mileage. EVs also benefit from a €30,000 OMV reduction in 2026 (€10,000 universal + €20,000 EV-specific), making them far more tax-efficient as a company car choice.
What is the BIK rate on a company van?
A flat rate of 8% of the van's OMV applies to all company vans in Ireland, regardless of CO₂ emissions or business mileage. The €10,000 universal OMV reduction also applies to vans in 2026, reducing the taxable value before the 8% is applied.
Can I reduce my BIK by making payments toward the car?
Certain qualifying payments made to your employer may reduce the taxable BIK value — Revenue rules apply and not all payments automatically qualify. Where a qualifying contribution applies, it is deducted from the taxable benefit before tax is calculated. Ensure any contributions are properly documented through payroll and seek advice from a payroll specialist if you are unsure whether a specific payment qualifies. See Revenue.ie for full guidance.
Related calculators
Other free Irish finance tools you might find useful.