Reviewed by Mustafa Bilgic
Founder, WebCalculator
BIK rates use the 2026/27 Income Tax bands and Class 1A NI rate (15%) published by HMRC. Payrolling became mandatory from 6 April 2026. Not financial advice.
The benefit in kind calculator shows the tax cost of any non-cash perk from your employer for 2026/27. Enter the taxable value of your benefit and your tax band to see the employee Income Tax charge and the employer Class 1A National Insurance at 15%. From April 2026 most benefits are payrolled, so the tax is deducted monthly through PAYE.
Employee and employer cost
Tax cost for a 20% / 40% taxpayer in 2026/27:
| Benefit | Typical value | Tax (20%) | Tax (40%) |
|---|---|---|---|
| Private medical (single) | £800 | £160 | £320 |
| Gym membership | £600 | £120 | £240 |
| Company van (private use) | £3,960 | £792 | £1,584 |
| Electric company car (£40k) | £1,600 | £320 | £640 |
| Interest-free loan (£15k) | £337 | £67 | £135 |
The electric car BIK of £1,600 assumes a 4% appropriate percentage on a £40,000 list price for 2026/27. For a detailed company car calculation, use the company car tax calculator.
A benefit in kind (BIK) is any non-cash perk you receive from your employer, such as a company car, private medical insurance, gym membership or interest-free loans over £10,000. HMRC treats the cash-equivalent value as taxable income. From April 2026 most benefits must be payrolled rather than reported on a P11D.
You pay Income Tax on the cash-equivalent value of the benefit at your marginal rate — 20%, 40% or 45%. Your employer pays Class 1A National Insurance at 15% on the same value. For example, a £5,000 benefit costs a 40% taxpayer £2,000 in extra tax and the employer £750 in Class 1A NI.
From 6 April 2026 payrolling benefits in kind became mandatory for most employers. Instead of reporting benefits on a P11D at year-end, employers must add the value to each payslip and deduct PAYE tax in real time. This means you see the tax cost monthly rather than as a year-end adjustment.
The most common BIKs are company cars (taxed by CO2 and list price), private medical insurance, beneficial loans over £10,000, employer-provided accommodation, company vans, fuel cards for private use, and gym memberships. Each has specific valuation rules set by HMRC.
For electric cars, yes — the BIK rate is just 4% of list price for 2026/27, making a £40,000 EV cost only £320 in taxable benefit at basic rate. Petrol and diesel cars have much higher BIK percentages (up to 37%), so the tax cost is significantly greater.
In some cases, yes. Salary sacrifice for pension contributions, cycle-to-work schemes, electric cars and childcare vouchers can reduce your gross pay and therefore your tax and NI. However, most other salary sacrifice arrangements are caught by the Optional Remuneration Arrangements rules, meaning you are taxed on the higher of the salary forgone or the benefit value.