Glossary · UK
What is Income In Kind?
Non-cash benefits provided by an employer that are taxed as if they were cash salary.
Full Definition
Income in kind, sometimes called benefits in kind (BIK), covers non-monetary remuneration such as company cars, private medical insurance, accommodation, or interest-free loans provided by an employer. HMRC treats most BIK as taxable employment income, with the taxable value reported on form P11D (or via payrolling). The employee pays Income Tax and Class 1A National Insurance Contributions are paid by the employer at 13.8%. For example, a company car with a list price of £30,000 and 35% CO2 band creates a BIK of £10,500, adding to the employee's taxable income. Some benefits are exempt, including employer pension contributions, cycle-to-work schemes, and childcare vouchers within set limits.