Electric Vehicle 0% Benefit in Kind Tax (BIK)

When you receive an electric vehicle as a company car for business use, there are certain BIK exemptions and discounts available.

Did you know that the new 0% BIK on EVs can be good for your business and employees too?!

A benefit in kind is any non-cash benefit of monetary value that an employer provides for their employee. These benefits are usually known as notional pay, fringe benefits or indeed perks. These benefits have monetary value and must therefore be treated as taxable income (www.Revenue.ie).

How could understanding BIK tax help you in your business?

Well, employers must deduct Pay As You Earn (PAYE), Pay Related Social Insurance (PRSI) and Universal Social Charge (USC) from their employee’s pay on the value of this benefit. When it comes to providing a working vehicle to an employee, a conventional company vehicle can attract up to 30% of the full retail price in Employee Gross Taxes. However, from 1 January 2021, no taxable benefit will arise for an employee or a director, where an employer provides an employee or director with an electric car or van (www.Budget.gov.ie). That means you get taxed less for providing an employee with an Electric Vehicle from 1 January 2021 (to 2022). Indeed you could stand to gain up to €4000+ in your first year of purchase!

Top 5 Points to Consider:

1. Employers can offer EV’s as a benefit to employees without attracting Employer PRSI.

2. Employees will benefit from no net pay deductions when provided with a EV Company Car.

3. Effectively an employee can benefit from free fuel from their employer due to the provision of electricity through company owned charge points, which does not give rise to a taxable benefit for the employee or director from 1 January 2021.

4. No BIK will be incurred on employees charging EVs at work – whether company owned or not.

5. The value of the electric vehicle must not be greater than €50,000.

6. Note that 0% BIK is not available on Hybrid or Plug-In Hybrid EV.

If you have more questions about how you or your company can gain from providing a 0% (BIK) electric vehicle to employees then do visit or contact us.

Electric Vehicle Grants

Find out the value of grant available for your electric vehicle, how to apply and what vehicles are eligible.

Find Out More

Home Charger Grant

When you purchase an electric car, you can claim up to €600 towards a home charger unit.

Find Out More

Electric Vehicles Explained

Thinking about making the switch to electric? Here is what you need to know.

Find Out More