A benefit in kind is non-cash remuneration made available by an employer. A company car that can be driven privately and housing provided free of charge or below market value are common examples. Their taxable value must be included in payroll even though no equivalent cash amount is paid.
Article 104 of the Income Tax Law starts from market value. Specific rules then provide practical valuation methods for certain benefits. The tax authority’s overview links the general rule with the company-car regulations and valuation guidance.
The taxable value in payroll
The benefit arises when the employee can use the asset privately. For a car, private use includes the journey between home and the normal workplace. For housing, the benefit begins when the accommodation is available on favourable terms.
The taxable amount is added to cash remuneration for the relevant payroll period. A contribution paid by the employee can reduce the benefit when the applicable valuation rule allows it. The calculation should therefore follow the employment terms, invoices and actual availability during the month.
The company-car rate starts with the dates
Contract and first-registration dates determine which company-car scale applies. Older vehicles may remain within an earlier carbon-emission scale. Vehicles entering the post-2024 regime follow the simplified electric, hydrogen and other-powertrain rates.
The 2025 regulation extended the favourable zero-emission transition. A qualifying pure-electric or hydrogen car registered by 31 December 2026 can use the lower transition rates. The same treatment can extend to registration by 31 December 2027 when the relevant contract was signed by 31 December 2026.
| Vehicle entering the current regime | Monthly flat rate |
|---|---|
| Qualifying efficient pure-electric car or hydrogen car | 0.5% |
| Other qualifying pure-electric car | 0.6% |
| Other powertrain | 2% |
The lower electric category depends on the statutory energy-consumption and, for one route, power criteria. The certificate of conformity and registration records provide the relevant technical data. The 0.5% rate should not be selected from the marketing name of the vehicle alone.
The transition after 2026
Outside the extended contract rule, the ordinary rates for a pure-electric car are 1% for the lower category and 1.2% for the other electric category. Hydrogen remains within the 1% category, while other powertrains remain at 2%. The tax authority’s company-car guidance sets out the rate architecture.
This creates two possible results for cars registered in 2027. A vehicle linked to a qualifying contract signed by the end of 2026 can remain at 0.5% or 0.6%. A vehicle outside that transition follows 1% or 1.2%. The signed contract and registration certificate therefore remain central evidence.
The flat-rate and logbook methods
Under the flat-rate method, the monthly benefit is the acquisition price when new, including options and VAT and after any commercial discount, multiplied by the applicable rate. That reference value also applies when the employer leases the vehicle or acquires it second-hand. Later market depreciation does not reduce the base.
The alternative is an actual-use calculation. A complete logbook records private travel, including home-to-work journeys. The private kilometres are valued from the vehicle’s documented ownership or leasing and running expenses. The valuation circular requires a monthly calculation.
The two methods should not be mixed selectively from month to month. The payroll file should show which method was used and how the amount was determined.
Employer-provided housing
Housing valuation depends first on whether the employer rents or owns the property. If the employer rents it, the rent normally represents the value. A lower comparable market rent can be used when the employer’s rent objectively exceeds the amount a third party would pay for a similar home.
Where no suitable comparison exists, the circular permits a unit-value method. For rented housing, the monthly value is 25% of the official unit value but cannot be lower than 75% of the rent excluding charges. For employer-owned housing, the same 25% base may be used, with monthly minimum values of EUR 8 per square metre for a studio or apartment and EUR 7 per square metre for other housing.
Furniture increases the calculated housing benefit by 10%. Electricity, water, heating and similar charges paid by the employer are added at their actual amount. Rent paid back by the employee reduces the benefit.
Cash reimbursement is different from housing provision
The housing method applies when the employer provides the home. If the lease is in the employee’s name and the employer reimburses or directly pays the rent, the employer’s payment is normally taxable remuneration at the amount paid. It is not automatically valued under the unit-value formula.
This distinction should not be confused with the separate statutory rental premium for eligible young employees. That exemption has its own age, salary and amount conditions and does not change the valuation of housing provided by the employer.
Salary reduction changes the valuation
The flat-rate methods do not apply in the same way when a benefit replaces part of an agreed cash salary. The valuation circular requires the salary reduction to be compared with the benefit’s actual value. If the actual value exceeds the reduction, the difference is an additional taxable benefit.
An employment amendment should describe the cash reduction and the benefit separately. Payroll treatment then follows the real arrangement rather than applying a favourable car or housing formula without checking the salary exchange.
Conclusion
Company-car and housing benefits enter payroll because they provide private value. For cars, the contract date, registration date and technical category determine the rate. For housing, ownership, comparable rent, charges and any employee contribution determine the amount. A consistent method and the underlying records are needed from the first month in which the benefit is available.
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Frequently Asked Questions
How is a company-car benefit in kind calculated?
Under the flat-rate method, the monthly taxable value equals the vehicle's acquisition price when new, including options and VAT and after any commercial discount, multiplied by the applicable rate. The same base is used for a leased or second-hand vehicle.
What company-car rates apply in 2026?
Qualifying pure-electric or hydrogen vehicles can use a monthly rate of 0.5% or 0.6% under the extended transitional rules. Other vehicles first registered under the post-2024 regime use 2%. Contract and registration dates must be checked before selecting a rate.
What changes for electric cars after 2026?
The ordinary post-transition rates are 1% for the more efficient pure-electric category or hydrogen vehicles and 1.2% for other pure-electric vehicles. A vehicle contracted by 31 December 2026 and registered by 31 December 2027 can remain within the extended 0.5% or 0.6% transition.
Can a logbook replace the flat-rate company-car method?
Yes. The actual-use method values private kilometres recorded in a complete logbook by reference to the vehicle's documented expenses. Home-to-work journeys count as private use for this calculation.
How is employer-provided housing valued?
A rented home normally starts from the rent or comparable market value. An employer-owned home starts from comparable rent and may use the official unit-value method where no comparison is available. Employee contributions reduce the taxable benefit, while employer-paid charges are added.
