Benefits
Benefit in kind (perks from work): which are taxed, and how
Last updated 16 October 2026
Perks from your employer are added to your pay and taxed with income tax, USC and PRSI, unless an exemption applies. What's taxed, what isn't, and company cars.
A benefit in kind (BIK) is anything of value your employer gives you other than cash. Examples are a car, health insurance, a loan at low interest or a voucher. Its value is added to your pay as 'notional pay', and your employer deducts income tax, USC and PRSI on it through payroll. You don't receive notional pay in cash. So your payslip adds it for tax and then takes it back out, and only the tax reduces what you are paid.
Who it applies to
You pay tax on benefits if your total income from the employer, including benefits, is more than €1,905 a year. Company directors pay it whatever their income. A benefit given to your spouse, children or guests counts as yours.
Common perks at a glance
| Perk | Treatment |
|---|---|
| Car parking at work | Tax-free. Parking fees your employer refunds are taxed, unless you were on a business journey. |
| Gym or sports facilities on site, open to all staff | Tax-free. If only some staff can use them, those who do are taxed on a share of the cost. |
| Gym membership paid by your employer | Taxed: the subscription is divided among the employees it covers. |
| Meals on the premises, open to all staff | Tax-free. Meal vouchers are taxed at their full face value. |
| Professional body subscription | Taxed, unless membership is required by law, by your duties, by the business, or as an essential condition of the job. |
| Laptop, phone or broadband for work | Tax-free where private use is incidental and you don't own it. |
| Bus, train, Luas or ferry pass | Tax-free where your employer buys it or it is part of an approved salary sacrifice. |
| Bike through the Cycle to Work Scheme | Tax-free within the scheme limits. |
| Health insurance | Taxed on the full premium, with relief you can claim back. |
| Crèche or childcare | Taxed, whether at work or paid to an outside provider. |
| Employer pension contributions | Tax-free to a Revenue-approved scheme. |
On top of these, your employer can give up to five gifts or vouchers a year worth €1,500 in all, tax-free. See the Small Benefit Exemption.
Company cars
A car you can use privately is valued at a percentage of its Original Market Value (OMV). That is the Irish list price, with VAT and Vehicle Registration Tax (VRT), when it was first registered. The percentage depends on its CO2 emissions and your business kilometres, and falls as business mileage rises. In 2026, cars other than the highest-emitting category get €10,000 off the OMV first.
Take a petrol car with an OMV of €40,000, emitting 120g of CO2 per km. It is driven 20,000 business km in 2026 by an employee on €60,000:
| Original Market Value | €40,000.00 |
| Less the 2026 reduction | (€10,000.00) |
| Taxed at 30% (category C) | €9,000.00 |
| Extra income tax, USC and PRSI for the year | €4,251.42 |
That is about €354.29 a month. Paying your employer towards running costs reduces the benefit euro for euro. Electric cars get a larger reduction: see BIK on electric cars. Vans have their own rule: see BIK on vans.
Other valuations
- Accommodation: the market rent, plus bills your employer pays.
- Cheap loans: the gap between the interest you pay and Revenue's specified rate.
- Other assets you use but don't own, such as furniture: 5% a year of their value when first provided.
Work it out
Sources
- Revenue: Taxable employer benefits (medical insurance, shares and others) (checked 16/10/2026)
- Revenue: Small Benefit Exemption: up to five benefits worth €1,500 a year from 2025 (checked 16/10/2026)
- Revenue: Private use of employer provided vehicles: how to calculate the taxable benefit (checked 25/10/2026)
- Revenue: Tax and Duty Manual Part 05-01-01b: Benefit in kind on the provision of vehicles (checked 25/10/2026)
General information, not tax advice. HeyPenny is not a tax agent.