Vehicle emissions and bands categories
The BIK cash equivalent on the use of an employer provided car will continue to be determined based on both the vehicle’s CO2 emissions and business kilometres undertaken, as follows:
| Vehicle Category |
CO2 Emissions (CO2 g/km) |
|
A
|
0g/km up to and including 59g/km
|
|
B
|
More than 59g/km up to and including 99g/km
|
|
C
|
More than 99g/km up to and including 139g/km
|
|
D
|
More than 139g/km up to and including 179g/km
|
|
E
|
More than 179g/km
|
| Lower Limit |
Upper Limit |
A |
B |
C |
D |
E |
| Kilometres |
Kilometres |
% |
% |
% |
% |
% |
|
-
|
26,000
|
22.5
|
26.25
|
30
|
33.75
|
37.5
|
|
26,001
|
39,000
|
18
|
21
|
24
|
27
|
30
|
|
39,001
|
48,000
|
13.5
|
15.75
|
18
|
20.25
|
22.5
|
|
48,001
|
-
|
9
|
10.5
|
12
|
13.5
|
15
|
The percentage BIK rate for vans when calculating the cash equivalent continues to be 8%.
Original market value (OMV)
The relevant percentage determined from the application of CO2 emissions and annual business kilometres should be applied to the OMV. The OMV of a vehicle is the price which it might reasonably be expected to fetch if sold before the date of its first registration. Finance Bill 2024 maintained the following OMV reductions:
- The reduction of €10,000 to the vehicle’s OMV (including all cars and vans) in categories A-D will remain in place until 31 December 2025. This reduction is not applicable to vehicles in category E.
- The current reduction of €35,000 in the OMV will continue to apply for all electric vehicles. This means that for an employee with an electric vehicle, they will benefit from an overall OMV reduction of €45,000 in 2025 which includes the €35,000 electric vehicle specific reduction to OMV plus the temporary universal reduction of €10,000 i.e. a total OMV reduction of €45,000.
- For 2026 and 2027, the electric vehicle OMV reduction will be €20,000 and €10,000 respectively.
Example
An employee is provided with an electric vehicle in 2025 with an OMV of €50,000, the cash equivalent of the vehicle will be €5,000 (i.e. €50,000 less €45,000).
Assuming the employee travels 35,000 business kilometres annually, the BIK rate under band A for this level of business mileage will be 18%. Therefore, the employee will be subject to total BIK notional pay of €900 (€5,000 x 18%) for the year.
Charging facilities for electric vehicles
An exemption from BIK currently applies where an employer provides a charging point for electric vehicles on their business premises, on the condition that the facility is available to all employees.
Finance Bill 2024 extends the BIK exemption to expenditure incurred by an employer in connection with the provision of a facility for the charging of an electric vehicle at a director’s or an employee’s home. This change will apply from 1 January 2025.
For the exemption to apply, the director or employee must have the private use of an employer-provided electric vehicle. A further condition is that the employer must retain ownership of the charging facility.
Furthermore, where an employer is currently providing a car to their employee and the employee is incurring home charging electricity costs, provided it can be shown that the employer is only reimbursing for the running costs of that employer vehicle, the employer may reimburse these costs incurred by the employee/director free of tax (on the condition that the employer retains sufficient supporting documents).
View the 2024 BIK rules
Company Vehicle BIK rules from 1 January 2024
