What is Benefit-in-Kind? The payroll implications explained.
BIK arises when an employer provides an employee with something of value that isn't cash — a company car, private health insurance, a subsidised staff loan, accommodation, or a share scheme benefit. Revenue treats the value of these benefits as part of the employee's taxable income, subject to PAYE, USC, and PRSI.
Since January 2023, BIK must be reported through payroll in real time — it can no longer be dealt with at year-end. The rules around company car BIK changed significantly from January 2023, with a new mileage-based calculation replacing the previous engine-size model. Electric vehicles have their own exemption rules with annual limits.
What Irish employers are required to do
- Value each benefit-in-kind correctly using the appropriate Revenue calculation method
- Payroll the BIK value through the employee's pay, submitted on or before the pay date
- Report BIK through the PSR — it forms part of each employee's total payroll submission
- Apply the correct mileage-based OMV calculation for company cars (rules changed January 2023)
- Calculate electric vehicle BIK correctly within the annual OMV exemption limits
- Report health insurance premiums paid by the employer as BIK at the correct value
- Report share scheme benefits (KEEP, SAYE, ESPP) at the correct trigger point
How CBCR handles it
CBCR handles BIK valuation and real-time reporting as part of standard payroll management. We apply the correct calculation method for each benefit type, stay current with Revenue's annual updates to BIK rules (particularly for company cars and EVs), and ensure every benefit is correctly payrolled and reported. If you're introducing a new benefit for staff, ask us before you roll it out. So you know the BIK implications upfront.
Not sure if you're compliant?
Book a free Payroll Health Check — 30 minutes, no obligation. We review this and every other compliance area — and tell you exactly where you stand. No obligation.