Benefit In Kind Changes 2026

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Significant changes to Benefit in Kind (BIK) rates for employer-provided cars in Ireland have taken effect from 1 January 2026. A new category incentivising the use of electric vehicles (EVs) has been introduced, and current temporary reliefs are being tapered. 

BIK cash equivalent on the use of an employer-provided car is determined based on:

1. the vehicle’s CO2 emissions
2. Annual business kilometres driven  
3. The Original Market Value (OMV) 

From 1 January 2026, an additional vehicle category A1 for zero CO2 emission cars has been introduced. See Table 1 below. 

TABLE 1: Vehicle categories based on C02 emissions

Business mileage (km)		Applicable percentage per vehicle Categories
Lower Limit	Upper Limit	Vehicle Cat A1	Vehicle Cat A	Vehicle Cat B	Vehicle cat C	Vehicle Cat D
-	26,000	15%	22.5%	26.25%	30%	33.75%
26,001	39,000	12%	18%	21%	24%	27%
39,001	48,000*	9%	13.5%	15.75%	18%	20.25%
48,001*	-	6%	9%	10.5%	12%	13.5%

* New A1 category introduced for electric vehicles

** The reduction of €10,000 to the vehicles OMV in categories A1-D will remain in place until 31 December 2026

*** An additional €20,000 OMV reduction applies to electric vehicles in 2026

The C02 emission categories are as follows:

TABLE 2: BIK Rates by km and Vehicle Category

Vehicle Category	C02 Emission (g/km)
A1	0g / 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

BIK Rates for Vans

The percentage BIK rate for vans when calculating the cash equivalent remains at 8%.

Extended OMV Reduction for Company Cars (Categories A1–D) 

Budget 2026 extended the Original Market Value (OMV) relief for company vehicles: 

• 2026 - reduction of €10,000
• 2027 - reduction of €5,000.
• 2028 - reduction of €2,500.

For 2026, a reduction of €10,000 can be applied to the Original Market Value of cars in categories A1, A, B, C and D. The reduction is not applicable to cars in Category E.

The reduction to the Original Market Value is in addition to the relief for electric vehicles.

Please contact Ruadhán O'Riordan Tax Manager OSK, for further details on Benefit-In-Kind or  visit Revenue.ie

Please contact OSK Advisers for details of our full range of tax and accounting services.

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