Private use of employer-provided vehicles

Updated on February 8, 2022

Overview

During the time that the person works for you, they could be able to have their own car. Because they help you, too. They would have to pay Remuneration As You Earn (PAYE), Pay Linked Social Insurance (Care . primary), and a Universal Social Fee (USC) because they make money for their own use.

When you go to work and come home, you do it on your own.

Most of the time, your employee will have to get a car from you to be charged with this crime, but it isn’t always. Even though they work for you, they’ll also have to pay again for car’s cost.

party:
It doesn’t matter exactly what sort business you have.

 

There are several kinds of cars that people call “cars,” like crew cabs and jeeps. :

bikes with less than 410 kg (see Personal Use of Corporation Vans)
Only if the employee doesn’t own the car does this part apply to him or her. It’s going to use the general guidelines for BIK in this case. In order to get more information, look into how much benefits are worth

To buy a car, you give the employee some money. This funds will be taxed because it’s for them. To be clear: In this case, no one will use this part.

Private use of employer-provided vehicles

How do you figure out how much of a tax break you get?
Make sure you know how much money your employee would have made had the company car been used for personal things. How much will you add to your employee’s pay? This is how much.

It is based on how much the car was worth when it was new. When it comes to this case, it’s based on how many miles the car did for work.

As long as your employee helps pay for the car to run, the cash value can be less.

a thing’s worth at that time (OMV)
This is the price of the car in Ireland before it has been registered. The OMV is this price. In Ireland, there are a lot of taxes and fees.

List price: This is what the car costs when it is first registered. It includes Value-Added Tax (VAT) and Vehicle Registration Tax (VRT), if any, are paid.

If you bought your car used, it doesn’t matter. Use the OMV.

Example 1: You buy or lease a second-hand car that was worth €25,000 before you bought or leased it. People who buy things for €25,000 will have to pay VRT and VAT, too.

It’s important to figure out how much it costs to make goods worth €25,000 this year in order to figure out how much tax we have to pay.

There are a lot of cars that were made outside of the United States that have a lot of OMV.
If you bought the car from another country, you should not pay any taxes or fees from that country.

It’s an example of how a discount can affect how much OMV you pay for things.
The OMV can be lowered if you got a discount when you bought the car. This will show how much money you saved!

Most of the time, the maximum discount is the amount of money that a normal person would get if they bought a car from a dealership and paid cash. This usually doesn’t go above 10% of the money.

For more discounts, you might have to show that you could have bought the same thing at the store even if you were not a VIP customer.

Before you buy something, you can set a discount level with your Revenue Office to make sure you get the best deal possible.

Example 3: How to figure out how much money is in an item.
When you add a percentage to the OMV, you can figure out how much money is in your account.

If your employee drives a lot for work, the percentage you use in the calculation will depend on how many miles he or she drives in a year. People who drive more for work get less money back. You should check your notional pay at least once a quarter to make sure the payments reported to Revenue are as accurate as possible.

There are percentages in the table below that apply to you. You can look at them to see what they are.

This is how much money you make each year by driving for work:

Percentage of OMV Driven: 24,000 and below

One-third:

3,247 to 3,288

One in four:

40,000 to 32,001

18%

48,000 to 40,001

12%

48,001

6 out of 10

Example 4: Your employee may not be able to show you how many private kilometres he or she drove in a year. In places where this happens, you must assume that 8,000 km are private km.

Example 5: Employees help pay for the cost of their work.
Your employee may have to pay for the car’s running costs or for the time they use it. Take the amount they pay out of what you get in cash instead.

In this case, you can only get the money back if your employee pays it to you.

Example 6: Employees help pay for the car.
Your employee might make a one-time payment to help pay for an employer-provided car. In the first year, the cash equivalent of the amount that was given goes down.

Examples 7 and 8 are both examples of how to write

Employees with low business kilometres

If your employee doesn’t travel more than 24,000 kilometres a year, the cash equivalent may be cut by 20%.

have to do the following things:

 

In general, you should work 20 hours a week.

travel 8,000 business miles a year

spend nearly 70% of their worktime away from the office.

Keep a log with information about how many miles you drive for work and why.

Example

Your employee drives a car provided by your company with an OMV of €30,000. They travel 9,000 kilometres a year for work. They don’t have to pay for the car’s cost, or its running costs.

 

An employee of yours spends more than 70% of the time at work away from your place of business.

 

The cash equivalent for the year is €7,200 (€30,000 x 24%).

 

Your employee is paid every week. €138.46 should be added to their pay.

Employer-provided vehicles not available for the full year

This means that you might not be able to use the car all year. Because your worker says:

I got a car this year. During the tax year, I sold my car. I went on a business trip without having my car with me.
To show how many days your employee used their car, you can change its cash equivalent to show how many days they spent in the car each week.

This is when you can figure out how much money the car is worth or how much money it makes by “annualizing” the business kilometres. How much money would they have made if the car had been used all year? People who work for you can see that.

How many days this year did the car not work?

Example
So last year, they used their car 153 days. The car costs €28,000.

He or she did work travel on his or her own time for 12,000 miles in 2017. He paid €750 to keep the car running.

There are 28,627 business miles this year.

How much money is in the form of a check? (kilometres driven between 24,000 and 32,000).

This number is then cut down to show how many days the car was used.

Benefits or advantages that can be written off can be worked out.

how much a certain thing is worth
The value of money
The money you’ll make if you add $30,000 to 24%. For $153,000,000, it would be $153,000,000.
€2,817
Pay for the running costs.
€750
The tax cut is €2,067.
This benefit is worth the same amount of money in cash during the whole year as it would be.

Exemptions

Car-pools

You don’t have to pay for Pay As You Earn (PAYE), Pay Related Social Insurance (PRSI), or the Universal Social Charge (USC) if people who work for you drive in a carpool with each other.

It goes to the following places:

At the same time, people can drive their cars.
This means that one person can’t always use a car. That means that other people can’t use the car, too.
It’s not very common for people who work at the place to use their cars for private things, like going home. People don’t usually keep their cars overnight at or near their homes. This is because it’s dangerous.
As part of their job, they drive a State-owned car. If:

As soon as they aren’t at work, they are on call, It would be called a “pool car.”
A person should call their local tax office to find out whether or not they can use a car pool.

Electric cars run on electricity.
BIK exemptions and discounts can be given to employees who drive electric cars, so if you let them use your car, they can get a lot of them.

It doesn’t work without electricity. Electric cars only run on electricity. There aren’t any points for people who drive hybrid cars on this list because they aren’t electric cars.

Treat new and used cars alike.

From 2018 on, there was no way to get out of this.
As far back as 2018, it’s possible that your employee could have used the electric car you gave him or her for their own private use. In 2018, there will be no charge from BIK for any use of the service by your employees.

As long as the exemption lasts from 2019 to 2022, it will stay that way for a whole year more.
In this time, people who work for you might be able to drive electric cars for their own cars, too. These kinds of things happen, and when they do, there are only a few places where the full exemption from BIK is possible.

It’s free:

If the OMV is less than $50,000 or if you gave the car to your employee between October 10, 2017 and September 9, 2018, your employee can use the car for private use in 2019 or 2020.
For example, if your employee drives his or her own car for personal use in the years 2021 or 2022, you’ll have to pay for that.
Less than €50,000.
If neither of the above things is true, it is only possible to get a partial exemption from the law. Because the OMV is €50,000 less than the cash value of the car, this is how it works.

Other BIK issues

Chauffeur driven cars

There may be two BIK charges for cars that are driven by a chauffeur. a fee:

There are costs to providing a chauffeur for the car.
Use of company cars in the motor industry
If your employee changes their car every month, there are special cash equivalents that apply. If you work in the motor industry, you have to follow these rules:

There are two types of motor retailers: one that only sells used cars and one that sells both new and used cars.
Your employee can’t get these special cash equivalents if he or she only drives one car for a month or more.

Ready reckoners

A Ready Reckoner is a tool that helps you figure out how much money an employer-provided car costs each pay period. Use the Ready Reckoner if you want to figure out how much this is, but you don’t have to.

This tool should make sure that the right amount of money is taken into account for PAYE, PRSI, and USC in a year. The Ready Reckoner can help you no matter what:

when the car is on the market
How long the car can be rented for is called the rental time.
Asked how to use the Ready Reckoners.
There are different reckoners for each of the following things:

Every month, they get paid for their work.
Employees are paid weekly.