Benefit in kind - how does it work?

H

help-me

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hi,

Im new to this so am hoping im posting in the right place, I'm currently looking for a new job and wondering about BIK how does it work?

Regarding company car etc? Do you have to pay so much every week?

Havent really got a clue myself, any information would be great. :confused:
 
Full details here. If you are getting a taxable BIK on a regular basis then it is effectively added to your gross and subject to tax and PRSI/health levy deductions like normal income. So if youre company car was considered to be a €500 p.m. BIK then this amount is added to your gross and the deductions calculated on the normal gross plus BIK amount.
 
The basic rules on BIK for a Car are as follows:

The BIK value is calculated based on your annual mileage and the Original Market Value (OMV) of the car:

<15k - 30%
15,001 to 20K - 24%
20,001 to 25k - 18%
25,001 to 30k - 12%
>30,001 - 6%

So OMV (less anything your paid towards the cars purchase, but only allowed for the 1st year) * Percentage from above table = Benefit In Kind.

The BIK is then / by 365 * Days you have use of the car. I.e. you don't pay BIK for the days the car is not available to you or your family etc.

The remaining BIK value is then added to your Gross Pay for PAYE and PRSI, but removed from your Net Pay, as you recieve it in use of the car.

BTW: the OMV value does not reduce as the car gets older, so unless you are doing high millage it is not worth while getting a company car. You can get a deduction in the <15k - 30% rate if you meet a number of rules.

Towger
 
excuse my ignorance, so say if im offered a company car worth 25000euro,
i get 12% of 25000euro = 3000euro

then divide 3000 by 365?

thats €8.21 per day, €57.47per week added to my gross and taxed, THEN subtracted from my Net? Am I right?

Thanks for replying to me, im hopeless never had a company car before:eek:
 
Yes, it would be deemed that your benefit is about €57 per week and the additional tax and PRSI due on this will be subtracted from your gross pay.
 
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