What is a P11D and which benefits are reportable?

A P11D is the HMRC form an employer files annually (by 6 July) to report each employee's taxable Benefits in Kind. Common reportable benefits include company cars and fuel, private medical insurance, gym membership, employer-provided living accommodation, interest-free loans above £10,000, and other non-cash perks. Cash bonuses run through PAYE so do not appear on the P11D - they are taxed at source. Benefits run through payroll ("payrolled" benefits) also bypass the P11D, but the underlying tax cost is identical.

How is the company car BIK calculated in 2026/27?

Company car BIK = P11D list price x appropriate percentage. The appropriate % depends on CO2 emissions: fully electric cars are 4% in 2026/27 (rising 1pp per year to 9% in 2029/30); plug-in hybrids 4-16% banded by electric-only range; petrol and hybrids scale from 17% at 51-54 g/km up to a 37% cap. Diesel cars not meeting RDE2 add a 4 percentage-point supplement (still capped at 37%). All 2021+ diesels typically meet RDE2 so avoid the supplement.

What is the fuel benefit charge for 2026/27?

If your employer pays for private fuel in a company car, HMRC charges you tax on a notional fuel benefit. The 2026/27 charge is calculated as your car's appropriate % multiplied by £28,200 (the published Fuel Benefit Charge multiplier; HMRC updates this annually with CPI). At 30% appropriate %, that is £8,460 added to your taxable income - £3,384 a year for a 40% taxpayer. For most employees this works out worse than paying for fuel yourself, so private fuel benefits are rarely worthwhile unless your private mileage is very high. Electric cars are exempt - HMRC does not treat electricity as fuel for P11D purposes.

How is private medical insurance taxed?

The full annual premium your employer pays for your private medical or dental cover (and any covered dependants) is the cash equivalent reported on your P11D. It is added to your taxable income for Income Tax at your marginal rate. A £1,500/year policy costs a 40% taxpayer £600/year in tax. Your employer also pays Class 1A National Insurance at 15% on the £1,500 - a £225 employer-side cost.

Who pays National Insurance on Benefits in Kind?

BIKs do not attract employee National Insurance under the standard P11D route - only the employer pays Class 1A NI at 15% (2026/27 rate, aligned with the main Class 1 Secondary rate from April 2025). This is one reason BIKs and especially salary-sacrifice EVs are tax-efficient: a £1,000 salary increase costs the employer 15% NI AND triggers 8% (or 2%) employee NI; the same £1,000 of BIK costs the employer only the 15% Class 1A and the employee nothing in NI.

Should I take a company car or a cash allowance?

It depends on three things: the appropriate %, your marginal tax rate, and what you would do with the cash alternative. For electric cars (4% in 2026/27) the BIK route is usually overwhelmingly cheaper than a cash allowance - a £50,000 EV costs a 40% taxpayer £800/year in tax versus £20,000+ a year if they took the cash and bought the same car post-tax. For petrol/diesel above ~120 g/km, the cash allowance often wins. Salary sacrifice on low-emission cars (under 75 g/km) is also exempt from the "optional remuneration arrangement" anti-avoidance rule, preserving the BIK route.

What is the difference between payrolled benefits and P11D?

Both produce the same Income Tax outcome - the difference is timing and administration. Payrolled benefits are taxed in real time through PAYE each pay period (no end-of-year P11D needed, employer must register before the tax year starts). P11D-reported benefits are taxed via a tax-code adjustment after HMRC processes the form, usually meaning a lower tax code for the following year. From April 2026 most BIKs will become mandatorily payrolled (HMRC has confirmed this is the direction of travel), with only a few exceptions like employer-provided accommodation continuing on P11D.

What happens to BIK when income hits the £100k personal-allowance taper?

Between £100,000 and £125,140 of adjusted net income, Personal Allowance is withdrawn at £1 for every £2 above £100k - producing a 60% effective marginal rate. BIKs add to adjusted net income, so a company car BIK that pushes you from £95k into the taper zone is taxed at 60% on the slice above £100k, not the 40% you might expect. The calculator handles this automatically by running the salary engine with and without the BIK and using the actual Income Tax delta.

UK P11D / Benefits in Kind 2026/27

Calculate the Income Tax cost of employer-provided Benefits in Kind - company car, free fuel, private medical, gym, accommodation and other taxable perks. Marginal-rate aware (handles the £100k personal-allowance taper) and includes the 15% Class 1A employer NI charge.

Worked scenarios for 2026/27

£40k EV, £75k salary (40% taxpayer)

£1,600 BIK

Income Tax £640/year - employer Class 1A £240
£30k petrol 130 g/km, £30k salary (20%)

£9,600 BIK

Income Tax £1,920/year - employer Class 1A £1,440
£35k petrol + free fuel, £60k salary (40%)

£18,960 BIK

Income Tax £7,584/year - employer Class 1A £2,844
£40k diesel non-RDE2 150 g/km (40%)

£14,800 BIK

Income Tax £5,920/year - employer Class 1A £2,220
Medical only £1,500/year (40%)

£1,500 BIK

Income Tax £600/year - employer Class 1A £225
Combined: EV + medical + gym (45%)

£4,100 BIK

Income Tax £1,845/year - employer Class 1A £615

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What is a P11D?

A P11D is the HMRC form an employer files annually - by 6 July following the end of the tax year - to report each employee’s taxable non-cash benefits. A copy goes to both HMRC and the employee. The “P11D value” of a benefit is its cash equivalent: the amount HMRC treats as additional taxable income, on which the employee pays Income Tax at their marginal rate and the employer pays Class 1A National Insurance at 15% (2026/27 rate).

Most workplace perks that have measurable economic value are reportable:

Company cars and free private fuel (the largest BIK by HMRC receipts, worth roughly £2 billion in tax annually).
Private medical and dental insurance paid by the employer.
Living accommodation provided by the employer.
Gym, sports club, and entertainment subscriptions.
Interest-free or low-interest beneficial loans above £10,000.
Vouchers, gift cards, and non-cash awards above the trivial-benefit threshold (£50 individual / £300 director annual cap).

Cash payments (bonuses, overtime, allowances) go through PAYE so do not appear on the P11D - they are taxed at source like normal salary.

How company car BIK works

Company car tax in the UK has been a CO2-linked system since 2002. The taxable cash equivalent equals:

P11D value (list price + factory options + VAT, less capital contributions up to £5,000)
  x  Appropriate Percentage  (from HMRC 480 Appendix 2)
  =  Annual BIK amount

The appropriate percentage rises with CO2 emissions. For 2026/27:

Battery EVs (0 g/km): 4% (up from 3% in 2025/26, was 2% in 2024/25). Policy timetable confirmed in the November 2023 Autumn Statement: the BEV rate rises 1pp per year, reaching 9% in 2029/30. EVs remain by far the cheapest company-car option.
Plug-in hybrids (1-50 g/km): banded by electric-only WLTP range. 130+ miles is 4%; 70-129 is 7%; 40-69 is 10%; 30-39 is 14%; under 30 is 16%. The “electric range” is the certified zero-emission WLTP distance from the V5C - not any “official combined” figure.
Petrol and hybrid (51+ g/km): starts at 17% for 51-54 g/km, rises 1pp per 5 g/km band, caps at 37% from around 160 g/km upwards.
Diesel non-RDE2: +4 percentage points on the petrol scale, still subject to the 37% cap. Virtually all 2021+ diesels are RDE2-compliant so avoid the supplement; older diesels (especially pre-2018 registrations) often attract it.

Worked example: £40,000 electric car, 40% taxpayer

P11D value: £40,000
Appropriate %: 4% (BEV 2026/27)
BIK: £40,000 × 4% = £1,600
Employee Income Tax: £1,600 × 40% = £640/year (£53/month)
Employer Class 1A NI: £1,600 × 15% = £240/year

Total cost-to-company for providing a £40k EV: £240/year in Class 1A. The employee pays £640 in tax to enjoy a £40,000 asset.

Worked example: £30,000 petrol hatch, 130 g/km, basic-rate taxpayer

P11D value: £30,000
Appropriate %: 22% + (130-80)/5 × 1% = 22% + 10% = 32%
BIK: £30,000 × 32% = £9,600
Employee Income Tax: £9,600 × 20% = £1,920/year (£160/month)
Employer Class 1A NI: £9,600 × 15% = £1,440/year

Same car, higher-rate taxpayer: tax doubles to £3,840/year. Same car at 150 g/km diesel non-RDE2: appropriate % jumps to 37%, BIK to £11,100, basic-rate tax to £2,220. The CO2 scale punishes ICE choices hard - one of the deliberate policy levers driving fleet electrification.

Free fuel benefit charge

If your employer pays for private (not just business) fuel in a company car, HMRC charges you tax on a notional Fuel Benefit Charge:

Fuel Benefit = Appropriate %  x  £28,200 (2025/26 multiplier; 2026/27 typically uplifted by CPI)

The multiplier is published annually by HMRC in the EIM25500 series. A 30% appropriate % on a 120 g/km petrol means £8,460 added to taxable income - £3,384/year for a 40% taxpayer. For most employees with normal private mileage (under ~10,000 miles/year), paying for fuel out of post-tax salary beats the BIK charge. The breakeven mileage is roughly:

Breakeven  ≈  (Fuel Benefit charge × marginal tax rate) / (pence per mile × 1/100)

For a 40% taxpayer at 12p/mile, that is approximately 28,000 private miles to break even on the £3,384 tax cost. Few employees drive that much privately, which is why most opt out of the fuel-benefit option even when offered.

Electric cars are exempt: HMRC EIM23900 confirms electricity is not treated as “fuel” for P11D purposes. Employer-paid home or workplace electric charging does not trigger a fuel benefit charge.

Private medical insurance

When the employer pays the premium for private medical or dental cover, the full annual premium is the cash equivalent reported on the P11D. There is no concept of “personal allowance” or “trivial benefit” exception - the whole premium is taxable income.

For a typical £1,500/year family policy:

Employee Income Tax: £1,500 × 40% = £600/year for a higher-rate taxpayer
Employer Class 1A NI: £1,500 × 15% = £225/year

This is still much cheaper than the employee buying equivalent cover with post-tax salary - a £1,500 individual policy bought privately costs £2,500 of gross salary for a 40% taxpayer once you add their NI. The employer also avoids paying employer Class 1 NI on the equivalent salary increase, so the employer-funded route is structurally tax-efficient.

Salary sacrifice and BIK

Salary sacrifice is an arrangement where the employee gives up cash salary in exchange for a non-cash benefit. The 2017 Optional Remuneration Arrangement (OpRA) rules removed most salary-sacrifice tax advantages - except for five protected categories:

Pension contributions (the original use case)
Employer-provided childcare (closed to new entrants since 2018)
Cycle-to-work schemes
Ultra-low-emission cars (under 75 g/km, includes all BEVs and most PHEVs)
Pension advice up to £500/year

For an EV salary-sacrifice scheme, the employee saves the Income Tax + NI on the sacrificed amount; the employer saves Class 1 employer NI on the same. The BIK charge applies but at the 4% rate it is trivial. Combined savings on a £50k EV over a 3-year lease commonly hit £15,000-£25,000 versus buying the same car privately.

P11D vs payrolled benefits

There are two ways to tax a BIK:

P11D route: employer reports benefits at year-end, HMRC adjusts the employee’s tax code for the following year. Cash flow lag of up to 18 months between benefit received and tax paid.
Payrolled benefits: employer registers before the tax year starts and taxes the BIK through PAYE each pay period in real time. No P11D needed (with a few exceptions), no tax-code lag.

Tax outcomes are identical - only timing and admin differ. From April 2026 HMRC is making most BIKs mandatorily payrolled, with employer-provided living accommodation and a handful of other categories continuing on P11D for technical reasons. The calculator’s logic applies equally to both routes.

Class 1A Employer National Insurance

The employer pays Class 1A NI on the total cash equivalent of all reportable BIKs - calculated annually, paid by 22 July following the tax year-end. The 2026/27 rate is 15% (up from 13.8% before April 2025; the 2024 Budget aligned Class 1A with the main Class 1 Secondary rate). Class 1A is a genuine employer-only charge: employees pay zero NI on BIKs under the standard P11D route.

This is one structural reason BIKs - especially low-emission cars - are tax-efficient relative to cash. A £1,000 salary increase costs the employer £150 of Class 1 NI AND the employee £80-£200 of Class 1 employee NI; the same £1,000 of BIK costs the employer £150 of Class 1A and the employee zero NI.

See our methodology for sources and testing approach.

UK Company Car Tax Calculator - drill into the CO2 scale and PHEV bands for a specific car.
EV Salary Sacrifice Guide - why sacrificing salary for an EV beats a cash allowance for most higher-rate taxpayers.
60% Tax Trap - what happens when a BIK pushes you into the £100k-£125,140 personal-allowance taper.
National Insurance Rates - Class 1A versus Class 1 in context.

Frequently asked questions

What is a P11D and which benefits are reportable?: A P11D is the HMRC form an employer files annually (by 6 July) to report each employee's taxable Benefits in Kind. Common reportable benefits include company cars and fuel, private medical insurance, gym membership, employer-provided living accommodation, interest-free loans above £10,000, and other non-cash perks. Cash bonuses run through PAYE so do not appear on the P11D - they are taxed at source. Benefits run through payroll ("payrolled" benefits) also bypass the P11D, but the underlying tax cost is identical.
How is the company car BIK calculated in 2026/27?: Company car BIK = P11D list price x appropriate percentage. The appropriate % depends on CO2 emissions: fully electric cars are 4% in 2026/27 (rising 1pp per year to 9% in 2029/30); plug-in hybrids 4-16% banded by electric-only range; petrol and hybrids scale from 17% at 51-54 g/km up to a 37% cap. Diesel cars not meeting RDE2 add a 4 percentage-point supplement (still capped at 37%). All 2021+ diesels typically meet RDE2 so avoid the supplement.
What is the fuel benefit charge for 2026/27?: If your employer pays for private fuel in a company car, HMRC charges you tax on a notional fuel benefit. The 2026/27 charge is calculated as your car's appropriate % multiplied by £28,200 (the published Fuel Benefit Charge multiplier; HMRC updates this annually with CPI). At 30% appropriate %, that is £8,460 added to your taxable income - £3,384 a year for a 40% taxpayer. For most employees this works out worse than paying for fuel yourself, so private fuel benefits are rarely worthwhile unless your private mileage is very high. Electric cars are exempt - HMRC does not treat electricity as fuel for P11D purposes.
How is private medical insurance taxed?: The full annual premium your employer pays for your private medical or dental cover (and any covered dependants) is the cash equivalent reported on your P11D. It is added to your taxable income for Income Tax at your marginal rate. A £1,500/year policy costs a 40% taxpayer £600/year in tax. Your employer also pays Class 1A National Insurance at 15% on the £1,500 - a £225 employer-side cost.
Who pays National Insurance on Benefits in Kind?: BIKs do not attract employee National Insurance under the standard P11D route - only the employer pays Class 1A NI at 15% (2026/27 rate, aligned with the main Class 1 Secondary rate from April 2025). This is one reason BIKs and especially salary-sacrifice EVs are tax-efficient: a £1,000 salary increase costs the employer 15% NI AND triggers 8% (or 2%) employee NI; the same £1,000 of BIK costs the employer only the 15% Class 1A and the employee nothing in NI.
Should I take a company car or a cash allowance?: It depends on three things: the appropriate %, your marginal tax rate, and what you would do with the cash alternative. For electric cars (4% in 2026/27) the BIK route is usually overwhelmingly cheaper than a cash allowance - a £50,000 EV costs a 40% taxpayer £800/year in tax versus £20,000+ a year if they took the cash and bought the same car post-tax. For petrol/diesel above ~120 g/km, the cash allowance often wins. Salary sacrifice on low-emission cars (under 75 g/km) is also exempt from the "optional remuneration arrangement" anti-avoidance rule, preserving the BIK route.
What is the difference between payrolled benefits and P11D?: Both produce the same Income Tax outcome - the difference is timing and administration. Payrolled benefits are taxed in real time through PAYE each pay period (no end-of-year P11D needed, employer must register before the tax year starts). P11D-reported benefits are taxed via a tax-code adjustment after HMRC processes the form, usually meaning a lower tax code for the following year. From April 2026 most BIKs will become mandatorily payrolled (HMRC has confirmed this is the direction of travel), with only a few exceptions like employer-provided accommodation continuing on P11D.
What happens to BIK when income hits the £100k personal-allowance taper?: Between £100,000 and £125,140 of adjusted net income, Personal Allowance is withdrawn at £1 for every £2 above £100k - producing a 60% effective marginal rate. BIKs add to adjusted net income, so a company car BIK that pushes you from £95k into the taper zone is taxed at 60% on the slice above £100k, not the 40% you might expect. The calculator handles this automatically by running the salary engine with and without the BIK and using the actual Income Tax delta.