Company Car BIK Ireland 2026: How It Works and How to Save

How company car BIK is calculated

The core formula hasn't changed:

Where:

• OMV = Original Market Value — the list price of the car when new (even if your employer paid less, Revenue uses the full list price)
• Reductions = universal OMV reduction and, for EVs, the EV-specific reduction (see section below)
• Rate = a percentage determined by two inputs working together:

1. CO2 category — A1 (zero-emission), A (0–59 g/km), B (60–99), C (100–139), D (140–179), E (180+)
2. Business mileage band — 0–26,000 / 26,001–39,000 / 39,001–48,000 / 48,001+ km/year

The BIK figure is added as notional pay each pay period — you pay PAYE, PRSI and USC on it at your marginal rate. For most middle-earning professionals that means roughly 52% of the BIK valuelands as actual tax cost.

2026 BIK rate table — every category, every mileage band

The full rate table (as applies from 1 January 2026):

Two structural changes worth noting:

• New A1 band: EVs were in Category A at 9–22.5% until end of 2025. In 2026, they move to the brand-new A1 at 6–15% — a significant rate reduction on top of the OMV reductions.
• Highest mileage threshold reduced: the lower limit of the highest band drops from 52,001 km to 48,001 km. Drivers doing 48,001–52,000 km now fall into the most generous band instead of the second-most.

The new Category A1 — the biggest 2026 change for EVs

Before 1 January 2026, EVs were lumped in with very-low-emission petrol hybrids in Category A (0–59 g/km CO2). From 2026, zero-emission vehicles get their own dedicated band: A1.

Combined with the €30,000 OMV reduction, this produces dramatic savings. A typical €50,000 EV driven 25,000 business km: taxable OMV €20,000 × 15% = €3,000 BIK — down from roughly €9,000 in prior years.

The two OMV reductions (and how they stack)

Before applying the percentage rate, you deduct two OMV reductions from the Original Market Value:

1. Universal OMV reduction (all cars A1–D and all vans)

2. EV-specific OMV reduction (Category A1 only)

The two reductions stack for EVs. A €50,000 EV in 2026 has:

• OMV: €50,000
• Less universal A1–D reduction: −€10,000
• Less EV-specific reduction: −€20,000
• Taxable OMV: €20,000

Vans — a flat 8%, mileage-agnostic

Commercial vans (N1 category vehicles) have an entirely different, much simpler BIK rule: 8% of OMV, regardless of CO2 emissions or business mileage. The €10,000 universal OMV reduction still applies in 2026.

A €30,000 van in 2026: (€30,000 − €10,000) × 8% = €1,600 BIK per year. For a higher-rate taxpayer, actual tax cost is about €830 per year — dramatically cheaper than a similarly priced car.

Worked examples across vehicle types

All figures below use the 2026 rate table and assume a higher-rate taxpayer (52% marginal rate including PRSI and USC). Your actual tax cost is the BIK figure × your marginal rate.

Example 1 — EV, typical commute use

• €50,000 OMV battery EV, 24,000 business km/year
• Combined OMV reduction: €30,000 → taxable OMV €20,000
• Business mileage band: 0–26,000 km → A1 rate 15%
• BIK: €20,000 × 15% = €3,000/yr
• Actual tax cost at 52%: €1,560/yr (~€130/month)

Example 2 — EV, heavy business mileage

• €50,000 OMV battery EV, 45,000 business km/year
• Combined OMV reduction: €30,000 → taxable OMV €20,000
• Business mileage band: 39,001–48,000 km → A1 rate 9%
• BIK: €20,000 × 9% = €1,800/yr
• Actual tax cost at 52%: €936/yr (~€78/month)

Example 3 — Petrol saloon, average use

• €40,000 OMV petrol saloon, 135 g/km CO2 (Category C), 24,000 business km/year
• Universal OMV reduction: €10,000 → taxable OMV €30,000
• Business mileage band: 0–26,000 km → C rate 30%
• BIK: €30,000 × 30% = €9,000/yr
• Actual tax cost at 52%: €4,680/yr (~€390/month)

Example 4 — Diesel SUV, motorway driver

• €55,000 OMV diesel SUV, 160 g/km CO2 (Category D), 50,000 business km/year
• Universal OMV reduction: €10,000 → taxable OMV €45,000
• Business mileage band: 48,001+ km → D rate 13.5%
• BIK: €45,000 × 13.5% = €6,075/yr
• Actual tax cost at 52%: €3,159/yr (~€263/month)

Example 5 — Van (flat rate regardless of mileage)

• €30,000 OMV van
• Universal OMV reduction: €10,000 → taxable OMV €20,000
• Flat BIK rate: 8%
• BIK: €20,000 × 8% = €1,600/yr
• Actual tax cost at 52%: €832/yr (~€69/month)

Home EV charger & electricity reimbursement

Home charger exemption (since 1 January 2025)

A home EV charger installed by your employer at your main residence is not a taxable benefit, provided all three conditions are met:

1. The employer retains ownership of the charger
2. The employee has the private use of an employer-provided EV
3. The charger is installed at the employee's sole or main residence in Ireland

Installation typically costs €1,100–€1,800 all-in — worth €500–€900 in after-tax value to the employee if treated as a benefit. This exemption removes the friction.

Electricity reimbursement

If you pay for home charging electricity and your employer provides the EV, your employer can reimburse electricity costs tax-free— provided:

• The reimbursement relates strictly to running the employer's EV (not personal use of other devices)
• The employer retains supporting documents — electricity bills, charger usage reports, kWh readings
• The amount reimbursed is reasonable (typically €0.06–€0.12/kWh for home night rates, see our EV home charging guide)

Combined with the BIK relief, this means the true cost of running an employer EV in 2026 can genuinely be close to zero — fuel reimbursed, charger free, and low BIK charge.

Company car vs cash car allowance

Many Irish employers now offer employees a choice: a company car with BIK, or a cash car allowance (typically €500–€1,500/month added to gross salary). Which is cheaper depends on car choice, mileage, and income tax bracket.

For 2026, a rule of thumb: if the company offers EVs as the company car option, take the car. The combined rate (6–15%) and €30,000 OMV relief generally make EV BIK cheaper than an equivalent cash allowance. For petrol/diesel options, run the numbers carefully — cash allowance often wins for Category D–E cars.

See our mileage rates Irelandguide if you're leaning toward a cash allowance — you'd use Revenue's civil service rates rather than BIK.

Record keeping — what Revenue actually requires

Your BIK rate depends on business mileage. Revenue can audit. You must maintain a contemporaneous mileage log (i.e. recorded as you drive, not reconstructed at year-end) showing:

• Date of the journey
• From and to addresses
• Business purpose (e.g. "client meeting, John Smith, Supplier X")
• Kilometres travelled
• Vehicle used

The log must be preserved for 6 years (standard Revenue record retention period). Key audit triggers:

• Claiming the highest mileage band (48,001+ km) without a detailed log to substantiate it
• Counting commuting as business mileage — this is not permitted and is a common error
• Round-number mileage claims that suggest estimation rather than tracking
• Mileage that doesn't reconcile with the odometer reading on the car

Why 2026 is the peak EV year — and what follows

The 2026 BIK treatment is the most favourable Irish EV drivers will ever see. Every subsequent year, combined reliefs taper:

Worked comparison — same €50,000 EV, same 24,000 business km/year, same 15% A1 rate:

• 2026 BIK: (€50,000 − €30,000) × 15% = €3,000 → ~€1,560 tax at 52%
• 2027 BIK: (€50,000 − €15,000) × 15% = €5,250 → ~€2,730 tax at 52%
• 2028 BIK: (€50,000 − €2,500) × 15% = €7,125 → ~€3,705 tax at 52%
• 2029 BIK: €50,000 × 15% = €7,500 → ~€3,900 tax at 52%

The same driver pays €2,340/year more in 2029 than in 2026for the same car. Over a 4-year lease, that's ~€6,000 of additional after-tax cost — worth factoring into the timing of your decision.

Frequently asked questions