Benefit in kind calculator (BiK tax)
A benefit in kind — private medical insurance, a gym membership, an interest-free loan over £10,000 — is taxed as if its cash value were added to your salary, at your marginal income tax rate. There is no employee National Insurance on it, and HMRC usually collects the tax by shrinking your tax code rather than through a visible payslip deduction.
Calculator
Benefit in kind calculator
Tax you pay on this £1,200 benefit
£240.00 a year
£20.00 a month, an effective 20.0% of the benefit's value. Usually collected through a reduced tax code rather than a payslip deduction.
Employee National Insurance on the benefit
£0.00
Most P11D benefits are outside employee NI. That is why £1 of benefit usually beats £1 of salary — but only if you would have bought the thing anyway.
What your employer pays (Class 1A NI)
£180.00
15% of the benefit's value, paid by the employer, not you.
What is a P11D, and how do you work out the tax on one?
A P11D is the form your employer files with HMRC after each tax year listing the cash equivalent of every benefit in kind you received; your copy should arrive by 6 July. This calculator works from those cash-equivalent figures, so it doubles as a P11D calculator — enter any line from the form (or from your payslip, if your employer payrolls benefits instead) to see what it costs you.
How benefits in kind are taxed
- The value is the cash equivalent your employer reports on a P11D (or through payrolling): what the benefit cost them, for most benefits. Your employer tells you this figure; enter it above.
- You pay income tax only. The value is added to your taxable income and taxed in whatever band it lands in — including the 60%+ zone if it drags your adjusted net income past £100,000. Your employer pays Class 1A National Insurance at 15% on it; you pay no NI at all.
- Company cars have their own rules. A car's cash equivalent is a percentage of its list price set by its CO₂ emissions, not what it cost the employer — use the company car tax calculator for that, or the EV salary sacrifice calculator for an electric car scheme.
- Some benefits are tax-free and should not be entered here — the table below shows which side common perks fall on.
Which benefits are taxable — and which are tax-free?
If a perk sits in the taxable column, enter its cash equivalent above; anything in the tax-free column never reaches your tax code at all.
| Taxable | Tax-free |
|---|---|
| Private medical insurance | Employer pension contributions |
| Gym membership | One mobile phone |
| Interest-free or cheap loans over £10,000 | Cycle-to-work scheme |
| Company car | Workplace parking |
| Free fuel for private miles | Trivial benefits under £50 |
Source: tax on company benefits on gov.uk, checked 2 September 2026.
How much does a £1,200 benefit actually cost?
The same benefit costs different people different amounts, because it is taxed at the rate that applies to the top of your income. Private medical cover valued at £1,200 on the 2026/27 rates:
| Salary | Tax on the benefit | Per month |
|---|---|---|
| £25,000 | £240.00 | £20.00 |
| £60,000 | £480.00 | £40.00 |
| £110,000 | £720.00 | £60.00 |
The £110,000 row is the one people are caught by: inside the personal allowance taper a benefit is effectively taxed at 60%, so the same cover costs roughly twice what it costs a basic-rate taxpayer. Scottish taxpayers pay their own marginal rate — check it against the Scottish bands.
Why your tax code changed when you joined the medical scheme
HMRC collects BiK tax by cutting your tax-free allowance. A £1,200 medical benefit turns a 1257L code into roughly 1137L: £1,200 less of your pay is tax-free, which claws back the tax on the benefit month by month. If your code looks wrong, the tax code checker shows what each code costs against the standard one.
2026/27 rates, checked 28 August 2026 by Hadi against gov.uk and the employer rates and thresholds. Method on the about page.
How to use the benefit in kind calculator
- 1
Choose the benefit: medical insurance, a gym membership, an interest-free loan, or enter a cash equivalent yourself.
- 2
Enter the value your employer reports, which is usually on your P11D.
- 3
Enter your salary so the benefit is taxed at your own marginal rate.
- 4
Read the annual tax on the benefit and its effect on your monthly take-home.
When should you use the benefit in kind calculator?
Use it when your employer gives you something other than money, since the cash equivalent is added to your taxable pay.
You have private medical cover at work
It is not free. The premium is added to your taxable pay and taxed at your rate.
Your tax code changed after a new benefit
HMRC collects the tax by reducing your allowance, which is why the code moved.
You are offered a benefit instead of pay
Comparing the after-tax value of both is the only fair way to judge the offer.
Checking a P11D
The cash equivalent on the form is the figure the tax is calculated from.
Where to go next
- Company car tax calculatorTo a company car has its own CO2-based calculation.Open
- Tax code checkerTo see why the benefit changed your code.Open
- Employers NI calculatorTo what the benefit costs your employer.Open
All 51 calculators share one tested engine, so a figure from the benefit in kind calculator agrees with every other page here. See the full calculator index or the pay and tax guides.