Company Car Tax Calculator 2026/27
Your 2026/27 company car tax — the BiK percentage for your car’s CO2 or electric range, the taxable benefit, tax per month at your rate, fuel benefit, employer Class 1A NI, the salary-sacrifice comparison and future-year rates. HMRC table confirmed.
| Appropriate percentage (BiK rate) | — |
|---|---|
| Taxable benefit (cash equivalent) | — |
| Your tax rate | — |
| Tax per year / per month | — |
| Fuel benefit | — |
| Employer’s Class 1A NI (15%) | — |
| Salary sacrifice: tax and NI saved vs BiK tax paid | — |
| Same car as petrol at 130 g/km (for comparison) | — |
| Future years | — |
In short
Company car tax is the car's P11D value multiplied by an appropriate percentage set by its CO2 emissions — 4% for electric cars in 2026/27, 4–16% for plug-in hybrids depending on electric range, and 17% to 37% for petrol and diesel (plus 4% for non-RDE2 diesels) — then taxed at your income tax rate. A £42,000 EV costs a higher-rate taxpayer about £56 a month; the same car at 130 g/km petrol would cost about £450 a month. The employer pays 15% Class 1A NI on the benefit.
Who this is for: UK employees offered a company car or a salary-sacrifice EV, and fleet managers.
Benefit-in-kind rates 2026/27
| Car | 2026/27 % | Tax on a £40,000 car, 40% taxpayer |
|---|---|---|
| Electric (0 g/km) | 4% | £640 a year |
| Plug-in hybrid, 1–50 g/km, 70–129 mile range | 7% | £1,120 |
| Plug-in hybrid, under 30 miles | 16% | £2,560 |
| Petrol 100 g/km | 26% | £4,160 |
| Petrol 130 g/km | 32% | £5,120 |
| Diesel (non-RDE2) 150 g/km | 37% (cap) | £5,920 |
- Rates rise one point a year for most cars to 2028/29; EVs reach 7% in 2029/30 and hybrids lose most of their advantage from April 2028.
- The employer pays 15% Class 1A NI on the same benefit — another reason fleets have gone electric.
- Private fuel paid by the employer is taxed on a fixed multiplier × the same percentage — usually more than the fuel is worth.
- Salary-sacrifice EV schemes let you lease an EV from gross pay, saving 40% tax + 2% NI for a higher-rate taxpayer and paying only 4% BiK.
See also: UK Take-Home Pay Calculator 2026/27.
Assumptions
- Appropriate % from the 2026/27 HMRC table by CO2 (electric range for 1–50 g/km) + 4% non-RDE2 diesel, capped at 37%.
- Benefit = (P11D − capital contribution up to £5,000) × % − private-use payments; tax = income tax on salary + benefit minus tax on salary alone.
- Fuel benefit = multiplier × %; Class 1A NI 15%; salary-sacrifice saving = tax + NI on the sacrificed amount.
Worked example
Zero-emission rate 4% → taxable benefit £1,680. On a £55,000 salary that is taxed at 40%: £672 a year, or £56 a month. The employer pays £252 of Class 1A NI. Sacrificing £6,000 of salary saves about £2,146 of income tax (part at 40%, part at 20% once you drop below £50,270) and £196 of NI = £2,342, so the scheme leaves you about £1,670 a year better off than taking the salary — before counting the car itself. The same car as a 130 g/km petrol would cost £5,376 a year in tax.
Frequently asked questions
How is company car tax calculated?
P11D value × the appropriate percentage for the car's CO2 (4% for electric, 17–37% for petrol and diesel in 2026/27) × your income tax rate (20%, 40% or 45%).
What is the BiK rate for electric cars in 2026/27?
4%, rising to 5% in 2027/28, 6% in 2028/29 and 7% in 2029/30.
Is a company car worth it?
For an EV or efficient hybrid, usually yes — especially through salary sacrifice. For a petrol or diesel at 30%+ you may be better off with a cash allowance and your own car.
Do I pay tax if I only use the car for work?
Yes, unless private use (including commuting) is genuinely prohibited and not made — a pool car. Any availability for private use triggers the full benefit.
Is a company van taxed the same way?
No — vans have a flat benefit charge (about £4,020 in 2025/26, zero for electric vans) regardless of price.
Do I pay BiK on a car I lease through salary sacrifice?
Yes — for cars over 75 g/km the higher of the BiK and the salary given up is taxed; for EVs and low-emission cars only the BiK applies, which is why EV schemes work.
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