Company Car Tax (BIK) Calculator
Estimate the annual and monthly Benefit-in-Kind tax on a company car, plus the employer’s Class 1A National Insurance cost, using 2026/27 HMRC bands.
Calculation Breakdown
Company Car Tax (BIK) Calculator UK 2026/27
Our Company Car Tax Calculator estimates the Benefit-in-Kind (BIK) tax you would pay on a company car, along with the employer’s Class 1A National Insurance cost, using HMRC’s appropriate percentage bands for the 2026/27 tax year. Enter the car’s P11D value, fuel type and CO2 emissions (or electric-only range for plug-in hybrids) to see an illustrative annual and monthly figure.
How Is Company Car Tax Calculated?
Company car Benefit-in-Kind is worked out in three steps. First, HMRC assigns an “appropriate percentage” to the car based on its CO2 emissions (or, for plug-in hybrids, its electric-only range). Second, that percentage is applied to the car’s P11D value to give the taxable benefit. Third, the employee pays Income Tax on that benefit at their marginal rate, while the employer separately pays Class 1A National Insurance on the same figure.
| Step | Calculation |
|---|---|
| 1. Taxable benefit | P11D value (less any capped contribution) x BIK % |
| 2. Employee tax | Taxable benefit x income tax rate (20%, 40% or 45%) |
| 3. Employer Class 1A NIC | Taxable benefit x 15% |
How to Use This Calculator
- Enter the P11D value – the list price including VAT, delivery and optional extras, excluding the first-year registration fee and VED.
- Select the fuel type – Petrol/standard hybrid, RDE2 or non-RDE2 diesel, plug-in hybrid, or fully electric.
- Enter CO2 emissions or electric range – use the WLTP CO2 figure for most cars, or the electric-only range for plug-in hybrids.
- Add any capital contribution – a one-off payment towards the car reduces the taxable P11D value, up to a GBP5,000 cap.
- Select your income tax band – Basic (20%), Higher (40%) or Additional (45%).
- Click Calculate BIK Tax to see your estimated results.
2026/27 BIK Percentage Bands
HMRC’s appropriate percentages for 2026/27 are set out below. Diesel cars that do not meet the RDE2 emissions standard attract a further 4 percentage point supplement, capped at the 37% maximum.
| CO2 Emissions | Electric Range (if 1-50g/km) | 2026/27 Rate |
|---|---|---|
| 0 g/km | N/A | 4% |
| 1-50 g/km | 130+ miles | 4% |
| 1-50 g/km | 70-129 miles | 7% |
| 1-50 g/km | 40-69 miles | 10% |
| 1-50 g/km | 30-39 miles | 14% |
| 1-50 g/km | Under 30 miles | 16% |
| 51-54 g/km | – | 17% |
| 55-59 g/km | – | 18% |
| 60-64 g/km | – | 19% |
| 65-69 g/km | – | 20% |
| 70-74 g/km | – | 21% |
| 75-79 g/km | – | 21% |
| 80-99 g/km | – | 22-24% |
| 100-124 g/km | – | 25-29% |
| 125-154 g/km | – | 30-36% |
| 155+ g/km | – | 37% (cap) |
Figures shown are illustrative HMRC appropriate percentage bands for 2026/27. For the full official table and any updates, see GOV.UK’s guidance on company car benefit-in-kind rates.
Why Are Electric Company Cars Cheaper to Tax?
Fully electric cars sit at the lowest BIK band because they produce no tailpipe CO2. The government has published EV rates several years in advance to give fleets and employees certainty: 3% in 2025/26, 4% in 2026/27, rising gradually in later years. Petrol and diesel cars are taxed on a sliding CO2 scale that reaches a 37% cap at 155g/km and above, so a like-for-like electric car can carry a taxable benefit many times smaller than a combustion equivalent.
What Counts Towards the P11D Value?
- Included: manufacturer’s list price, VAT, delivery charges, and any accessories fitted before or shortly after the car is first provided.
- Excluded: the first-year vehicle registration fee and Vehicle Excise Duty (VED/road tax).
- Capital contributions: a one-off payment by the employee towards the car’s price reduces the P11D value used in the calculation, up to a maximum of GBP5,000.
- Fixed for the car’s life: the P11D value does not reduce as the car ages or depreciates – it stays fixed at the original list price throughout the benefit period.
Employer Class 1A National Insurance
Alongside the employee’s Income Tax charge, the employer pays Class 1A National Insurance on the same taxable benefit value, currently at 15%. This is reported annually via the P11D and P11D(b) forms, with payment normally due by 22 July following the end of the tax year (19 July if paying by cheque).
Frequently Asked Questions
How accurate is this calculator?
This calculator provides an illustrative estimate using HMRC’s published 2026/27 appropriate percentage bands. It does not account for every individual circumstance, such as part-year availability, multiple company cars, or optional remuneration arrangement (salary sacrifice) rules, which use a different valuation method. For a definitive figure, check GOV.UK or speak to your payroll department.
What is the P11D value?
The P11D value is the car’s list price when new, including VAT, delivery and any factory-fitted accessories, but excluding the first-year registration fee and Vehicle Excise Duty. It stays fixed for as long as you have the car as a company vehicle, regardless of any discount you negotiated or how much the car depreciates.
Does a capital contribution reduce my tax?
Yes. If you make a one-off payment towards the cost of the car, this reduces the P11D value used in the BIK calculation, up to a maximum of GBP5,000. Regular running-cost contributions (such as towards fuel) do not reduce the P11D value in the same way.
How is a plug-in hybrid (PHEV) taxed differently?
Plug-in hybrids with CO2 emissions of 1-50g/km are banded by their electric-only range rather than CO2 alone. A PHEV that can travel 130 or more miles on electric power alone qualifies for the lowest band, while one with under 30 miles of electric range sits in a higher band, closer to a low-emission petrol car.
What is the diesel supplement?
Diesel cars that do not meet the Real Driving Emissions Step 2 (RDE2) standard attract a 4 percentage point supplement on top of the standard CO2-based rate, capped at the overall 37% maximum. Most diesel cars registered from January 2021 onwards meet RDE2 and are not affected – check your vehicle’s documentation to confirm.
Who pays Class 1A National Insurance?
The employer pays Class 1A National Insurance on the taxable benefit value, not the employee. It is a separate cost to the business, currently charged at 15% of the same figure used to calculate the employee’s Income Tax.
Does this calculator include the fuel benefit charge?
No. This tool covers the car benefit only. If your employer also pays for private fuel, a separate fuel benefit charge applies, calculated using a fixed annual multiplier and the same CO2 percentage as the car benefit.