Benefit in Kind is Changing
BIK Changes
From 1st Jan 2023 the Benefit in Kind on the use of an employer provided vehicles will be determined based on both the business mileage undertaken and the automobiles’ CO2 emissions. These changes have been brought in on the back of the Irish government’s Climate Action Plan which seeks to lower emissions by 2030.
The changes may increase costs for both employers and employees where vehicles fall into a higher CO2 emissions bracket and employers are encouraged to become aware of the new changes. The new rules will apply to all cars and electric vehicles, whether the car is attained in 2023 or was made available to employees earlier.
From 1st January 2023 the BIK cash equivalent is calculated as follows:
| Lower Limit | Upper Limit | A | B | C | D | E |
| KMs | KMs | % | % | % | % | % |
| – | 26,000 | 22.5 | 26.25 | 30 | 33.75 | 37.5 |
| 26,001 | 39,000 | 18 | 21 | 24 | 27 | 30 |
| 39,001 | 52,000 | 13.5 | 15.75 | 18 | 20.25 | 22.5 |
| 52,001 | — | 9 | 10.5 | 12 | 13.5 | 15 |
The CO2 emissions categories are available in the below table:
| 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 |
To see how these changes impact BIK calculations please see the below example:
| An employee who has a company vehicle with the following details: | |
| OMV | €36000 |
| Annual Business kms | 25,000 |
| CO2 Emissions | 150g per km |
| 2022 | 2022 Annual BIK | 2023 | 2023 Annual BIK | Increase |
| €36000 x 24% | €8,640 | €36000 x 33.75% | €12,150 | €3,510 |
BIK Changes for Company Vans & Electric Vehicles for 2023:
In addition to the changes listed above the BIK rate for an employer provided company van will increase from 5% to 8% of the OMV effective 1st January 2023.2023 will also see the current €50,000 exemption on electric provided vehicles abolished. From January 1st, 2023 the OMV will be reduced by €35,000 making the exemption worth €20,000 in 2024 and €10,000 in 2025.
Below is an example of the how this will impact those who provide their employees with electric vehicles based on the 0-26,000 km BIK bracket
| 2022 | 2023 | 2024 | 2025 | |
| OMV | €45,000 | €45,000 | €45,000 | €45,000 |
| Less Exemption | €50,000 | €0 | €0 | €0 |
| Reduction of OMV | €0 | €35,000 | €20,000 | €10,000 |
| OMV for BIK purposes | €0 | €10,000 | €25,000 | €35,000 |
| Rate of BIK | €0 | 22.5% | 22.5% | 22.5% |
| Notional Pay | €0 | €2,250.0 | €5,625.0 | €7,875.0 |
To Find Out More about Benefit In Kind Read:
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