This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our privacy notice.

How are employees taxed on benefits-in-kind?

Shared from Tax Insider: How are employees taxed on benefits-in-kind?
By Meg Saksida, November 2021

Meg Saksida explains the mechanics of how benefits-in-kind are taxed to income tax. 

Employees in the UK are chargeable to income tax on their net taxable earnings. These earnings are made up of the employees’ cash earnings, such as their salaries, wages and any bonuses, as well as any benefits-in-kind they might receive.  

Benefits-in-kind are non-cash earnings which are given to an employee in addition to their wages. Common examples are medical insurance and company cars. 

The default rule 

The value of the benefit is the ‘cash equivalent’ of the benefit. The cash equivalent is the amount that the benefit cost the employer, less any amounts that the employee contributed towards it. The cost to the employer may be an external cost, such as providing a membership to a club, or an internal cost, such

This is one of our 2129 Premium articles

To see this article in full and unlock access to our complete library of 2129 articles click 'subscribe & unlock' below:

Subscriptions include a 14 day free trial
+ money back satisfaction guarantee

Start your free trial today

Interested in receiving the latest monthly tax saving tips? Start your 14 day free trial to our newsletters today.