Company car: Benefit in kind

Companies can provide their employees with company a car.

If an employee uses a company for personal purposes, this usage is considered as benefit in kind. That means that part of the value of the car is subject to social contributions and income tax.

There are 2 methods to compute the value of a benefit in kind.

Fix value

The car benefit in kind value can be a fix value based on the cost of the vehicle (owned or leased).

Owned car

When the company own the car it provides to its employees, the benefit in kind is of 9% of the purchase cost, all tax included (6% if the car over 5 years when it is bought).

If the employer pays the fuel for the personal usage of the car the benefit in kind is then of 12% of the purchase cost, all tax included (9% if the car over 5 years when it is bought).

Leased car

If the company lease the car used by the employee for personal purposes, the benefit in kind is of 30% of the global cost of the lease, all tax included. This global cost includes the lease, the maintenance and the insurance.

If the employer pays the fuel for personal usage of the vehicle the benefit in kin is then of 40% of the global cost of the lease, all tax included.

FPExpert advice

The benefit in kind is a yearly value. However, it is added monthly to the payroll. It is very common that the monthly value be an estimate of the benefit in kind. And that in December the value of the benefit in kind includes the yearly adjustment.

The best way to compute the global cost of a leased vehicle is to sum the cost registered in the accounting book.

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