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Help with BIK calculation

  • 20-12-2023 2:13pm
    #1
    Eleusis
    Registered Users, Registered Users 2 Posts: 318 ✭✭


    Anyone who has expereince with this help with figuring out BIK for me. I cant seem to wrap my head around it.

    Thinking of getting my business to buy a car. It has OMV of €56860. Its a 2020 car. I would be using it for approx 5000 business km and likely another 15k personal Km usage.



Comments

  • #2
    Lenar3556
    Registered Users, Registered Users 2 Posts: 1,554 ✭✭✭Lenar3556


    It will depend on the emissions category of the car in question. See: https://www.revenue.ie/en/employing-people/benefit-in-kind-for-employers/private-use-company-cars/calculate-value-benefit.aspx

    As a rough example, if the car was in category C;

    Reduce OMV by 10k for 2024 year.

    €46860 x 30% = €14,058. This sum is treated as notional income and you pay Income tax, USC and PRSI on it. For people in the 40% tax bracket, it’s roughly half. So the BIK cost to the employee on that car is about €7k annually in net terms.



  • #3
    drunkmonkey
    Registered Users, Registered Users 2 Posts: 28,448 ✭✭✭✭drunkmonkey


    Did you do anything with this, bik isn't on the omv of the car it's on the new price. So a 2020 Range Rover for 50k you'd be paying bik on the new price of 150k for example.

    Can still make a lot of sense to put it through the business even with little business milage.



  • #4
    Eleusis
    Registered Users, Registered Users 2 Posts: 318 ✭✭Eleusis


    Decided not to go the company car bik route. Did the calculations and financially it didn't seem to make much difference either way.



  • #5
    Lenar3556
    Registered Users, Registered Users 2 Posts: 1,554 ✭✭✭Lenar3556


    https://www.boards.ie/discussion/comment/121591041#Comment_121591041

    Yes - OMV is original market value in this context.

    A company car with low business mileage - does it really make sense any more?



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