Taxable Benefits Calculator

How the taxable benefits calculator works

1. 1

   Enter the cash equivalent of each benefit

   Add the taxable value of private medical insurance, beneficial loans and any other reportable benefits. If the employee reimburses part of the cost, enter that as made good so it reduces the taxable amount.

2. 2

   Use the company car module for vehicles

   Rather than asking you for a pre-calculated benefit figure, the car module takes list price, CO2 emissions, fuel type and electric range and derives the appropriate percentage and the taxable car benefit itself.

3. 3

   Choose the employee's marginal Income Tax rate

   Benefits are taxed at the employee's highest rate of Income Tax, so the same company car costs a higher-rate taxpayer twice as much as a basic-rate taxpayer. Select 20%, 40% or 45% to match their position.

4. 4

   Read the employee tax and employer Class 1A liability

   The result splits the total cash equivalent, the employee's Income Tax estimate at the marginal rate, and the employer's Class 1A National Insurance charge at the 2026/27 rate of 15%.

How benefit in kind tax is calculated

Taxable value = cash equivalent - amounts made good Car benefit = list price x appropriate percentage x (days available / 365) Employee tax = taxable value x marginal Income Tax rate Employer Class 1A = taxable value x 15%

• •The appropriate percentage for a company car runs from 4% for a fully electric car up to a maximum of 37% for the highest CO2 bands.
• •An optional diesel supplement adds 4 percentage points for cars that do not meet the required emissions standard, still subject to the 37% cap.
• •Private fuel provided for a company car is charged separately using the 2026/27 car fuel benefit multiplier of £29,200 multiplied by the same appropriate percentage.
• •Payments the employee makes for private use of the car reduce the car benefit, but never below zero.

Worked example: an electric company car plus private medical cover

An employer provides a fully electric company car with a list price of £35,000 and an electric range of 130 miles, available for the whole tax year, plus private medical insurance with a cash equivalent of £800. The employee is a higher-rate taxpayer.

Car list price

£35,000

Appropriate percentage (fully electric)

4%

Taxable car benefit

£1,400.00

Private medical insurance

£800.00

Total cash equivalent of benefits

£2,200.00

Employee Income Tax at 40%

£880.00

Employer Class 1A National Insurance at 15%

£330.00

The benefits cost the employee £880.00 in Income Tax and the employer £330.00 in Class 1A National Insurance for the year.

Company car appropriate percentages for 2026/27

The appropriate percentage is applied to the car's list price. Bands for cars emitting 1 to 50 g/km depend on the electric-only range.

Source: UK Government, UK Government

Reporting taxable benefits correctly

Non-payrolled benefits go on P11D and P11D(b)

Benefits that are not payrolled are reported on a P11D for each employee, with the employer's Class 1A National Insurance declared on the P11D(b) return after the end of the tax year.

Payrolling removes the employee P11D but not Class 1A

If benefits are payrolled, the tax is collected through payroll during the year and an employee P11D is generally not needed, but the employer still has to report and pay Class 1A National Insurance separately.

Watch the July deadlines

The standard deadlines after the end of the tax year are 6 July for P11D and P11D(b) reporting and 22 July for electronic payment of Class 1A National Insurance.

Some benefits are exempt

Not everything provided to an employee is taxable. Certain expenses and benefits are exempt from reporting, so confirm the treatment of an item before including a value in the calculator.

Frequently asked questions

What is the Class 1A National Insurance rate for 2026/27?

Class 1A National Insurance on taxable expenses and benefits is charged at 15% for 2026/27. It is an employer-only charge, calculated on the total cash equivalent of the benefits provided, and it is reported on the P11D(b) return after the end of the tax year. Employees pay Income Tax on the same benefit value at their own marginal rate rather than paying Class 1A.

How is company car tax worked out?

The taxable car benefit is the list price multiplied by an appropriate percentage based on the car's CO2 emissions, fuel type and, for plug-in hybrids emitting 1 to 50 g/km, its electric-only range. That percentage starts at 4% for fully electric cars and is capped at 37%. The benefit is then apportioned if the car was only available for part of the year, and reduced by any payments the employee makes for private use.

When are P11D and P11D(b) returns due?

The standard deadline for filing P11D and P11D(b) returns is 6 July following the end of the tax year, with electronic payment of the Class 1A National Insurance due by 22 July. Missing these dates can trigger penalties, so employers with a large number of benefits often payroll them instead to spread the reporting effort across the year.

Do payrolled benefits still need a P11D?

Generally no. If a benefit is payrolled, the Income Tax is collected through payroll during the year and the employee usually does not need a P11D for it. The employer still has to report and pay Class 1A National Insurance on those benefits separately, so payrolling reduces the reporting burden without removing the employer National Insurance charge.

Does paying towards a company car reduce the tax?

Yes. Payments an employee makes specifically for the private use of the company car reduce the taxable car benefit, although the benefit cannot be reduced below zero. Making good the cost of another benefit works the same way, which is why the calculator has a separate made-good field to deduct from the cash equivalent before tax is applied.