Private use of employer provided vehicles
Overview
As an employer, you may provide your employee with a car for private use. Where this happens, your employee has received a benefit in kind (BIK) for the value of that private use. You must deduct Income Tax, Pay Related Social Insurance (PRSI) and Universal Social Charge (USC) for this through payroll.
Travel to and from work is generally considered private use.
Your employee will also be liable to a BIK where they have use of a private car because they are employed by you. This may arise where, for example, a car is provided for sponsorship purposes from:
- a connected party
- or
- a third party.
Details of third party benefits are found in the Tax and Duty Manual Part 05-01-01m.
The information in this section applies to you whether you are a company, a partnership or a sole trader.
Note
For the purposes of this section of the website, an ‘employer provided vehicle’ refers to all cars provided to employees from their employer.
A ‘car’ can be any car within the ordinary meaning of the word. It does not include:
- motor-cycles less than 410kg
- vans (please see Private use of company vans)
- or
- vehicles not commonly used as a private vehicle and unsuitable for such use, for example, hearses and lorries.
This section is only applicable where ownership of the car does not transfer to the employee. If you transfer the car to your employee, general benefit in kind (BIK) rules shall apply. For further information, please see valuation of benefits.
If you pay an allowance to an employee to allow them to purchase a car, this will be taxable salary. This section will not apply.
Revenue introduced a concessionary measure regarding travel restrictions due to the COVID-19 pandemic. For further information, please see Employer provided vehicles in BIK changes during COVID-19 restriction.
Next: How to calculate the taxable benefit