Glossary · UK

What is Benefit in Kind?

A non-cash perk from your employer — such as a company car or private medical cover — taxed via P11D and Class 1A employer NI.

Full Definition

A benefit in kind (BIK) is anything of value an employee or director receives from their employer that is not cash pay — common examples are company cars, private medical insurance, gym memberships, interest-free loans over £10,000 and living accommodation. The taxable value (the «cash equivalent») is added to the employee's income and taxed at their marginal Income Tax rate. The employer pays Class 1A National Insurance on most BIKs, charged at 15% for 2025/26 (up from 13.8% in April 2025), reported either on form P11D after year end or, increasingly, through payroll. Company car BIK is based on the car's list price multiplied by a CO2-based percentage, with very low rates for fully electric vehicles (3% in 2025/26, rising 1% a year).