Benefits in Kind (BIK) are non-cash benefits employers provide to employees, from company cars to private healthcare. While they’re often part of an attractive benefits package, they’re also taxable. Here’s what you need to know about how BIKs affect your tax responsibilities.
Examples of Taxable Benefits in Kind
Accommodation
Private health insurance
Non-cash gifts and vouchers
Personal use of computers or phones
Subsidised meals or entertainment
BIK Exemptions
Pension contributions
Work-related training
Small staff discounts
Tea, coffee and amenities at work
Business travel
How BIKs Are Taxed
Each BIK is taxed based on its value, often added to an employee’s income.
Employers pay Class 1A NICs on the value of BIKs.
Payrolling BIKs
Including BIKs in your payroll allows tax to be spread across the year.
From April 2026, it becomes mandatory
Using HMRC’s Tools
Use HMRC’s online calculator to estimate tax for company cars
Need Help?
Profectus Accounting can help you calculate BIKs, submit forms accurately, and manage payroll obligations.
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