Vehicle Benefit in Kind in 2025 

The management of benefits in kind related to company vehicles is a key aspect of salary policy and fleet management. In 2025, the rules will change significantly, particularly following the decree of February 25, 2025. These changes, which will apply to all vehicles made available from February 1, 2025, will impact the calculation of social security contributions for employers and income tax for employees.

Whether you are a fleet manager, HR manager, or beneficiary employee, this comprehensive guide details everything you need to know to approach 2025 with confidence and optimize the overall cost of your mobility.

What is a vehicle benefit in kind?

A vehicle benefit in kind is an asset made available to an employee by their company for mixed use, i.e., both professional and personal. This private use is considered a salary supplement and, as such, is subject to social security contributions and income tax.

Definition and types of vehicles concerned

The benefit in kind applies as soon as an employee can use a company vehicle outside of working hours, including weekends and holidays. All types of passenger vehicles may be eligible: combustion engine, hybrid, and electric.

Difference between a company car and a service vehicle

It is crucial to distinguish between these two concepts:

• Company car: This is made available to the employee at all times, who may use it for both business and personal travel. It is this availability that constitutes a benefit in kind.
• Service vehicle: Its use is strictly limited to business needs. The employee may not use it for private purposes. It is therefore not a benefit in kind.

Calculation of the vehicle benefit in kind in 2025

This benefit can be assessed using two methods, at the employer's discretion: on a flat-rate basis or on the basis of actual expenses incurred. The major change for flat-rate assessment is the introduction of new rules for all vehicles made available on or after February 1, 2025.

Flat-rate assessment method

This is the simplest method. The benefit is calculated as a percentage of the purchase price including tax or the rental cost.

Vehicles made available before February 1, 2025

For vehicles already allocated before this date, the old rules continue to apply.

1-Calculation for combustion engine and hybrid vehicles:

• Purchased vehicle: The benefit is 9% of the purchase price including tax (6% if the vehicle is more than 5 years old). If the employer pays for fuel, the rate increases to 12% (9% if more than 5 years old).
• Leased vehicle: The benefit is 30% of the total annual cost (lease, maintenance, insurance). This rate rises to 40% if fuel costs are covered.
• Calculation for 100% electric vehicles: The rules are the same, but a 50% reduction is applied to the amount of the benefit, capped at €2,000.30 per year for 2025. Electricity costs paid by the employer for recharging are not included in the calculation.

Vehicles available from February 1, 2025

A decree dated February 25, 2025 tightened the calculation basis for new contracts.

2-Calculation for combustion engine and hybrid vehicles:

• Purchased vehicle: The flat rate increases to 15% of the purchase price including tax (10% if more than 5 years old). With fuel included, the overall flat rate reaches 20% (15% if more than 5 years old).
• Leased vehicle: The flat rate increases significantly to 50% of the total annual cost (lease, maintenance, insurance). With fuel costs covered, this rate can rise to 67%.
• Calculation for 100% electric vehicles: The calculation percentages are the same as for combustion engines, but the benefits are preserved by a more generous allowance mechanism. For an electric vehicle that meets a certain environmental score, the allowance is 70%, with an annual ceiling raised to €4,582. Electricity costs remain excluded from the calculation basis.

Method of assessment based on actual expenses incurred

This method, which is more accurate, requires rigorous monitoring. It is useful if personal use of the vehicle is low.

1-Expenses taken into account:

• For a purchased vehicle: depreciation of the purchase (20% per year over 5 years, then 10%), insurance, and maintenance costs.
• For a leased vehicle: total annual cost of leasing, maintenance, and insurance.
• Added to this is the proportion of kilometers driven for private use in relation to the total mileage. Fuel or electricity costs for private use are added if the employer covers them.

2-Calculation example: For a vehicle with actual annual expenses (depreciation, insurance, maintenance) of €6,000, which travels 20,000 km per year, including 4,000 km for personal use.

Calculation of the benefit: (€6,000 x 4,000 km / 20,000 km) = €1,200 per year.

New features for 2025: main changes

The year 2025 is a pivotal year, marked by the decree of February 25, 2025.

• Increase in flat rates for combustion engine vehicles: As detailed, the percentages used for the flat-rate calculation will increase significantly for all vehicles made available after February 1, 2025, which will increase costs for companies and employees.
• Maintenance of advantageous provisions for electric vehicles: Despite the increase in base rates, the government is maintaining a very favorable regime for electric vehicles through an enhanced allowance (70% capped at €4,582), extending this measure until December 31, 2027.
• Specific allowances: The allowance for electric vehicles is now conditional on achieving a minimum environmental score, favoring the most virtuous models.
• Taking charging stations into account: The advantageous rules on the provision of charging stations are also being extended.

Electric vehicles and charging stations

The energy transition is at the heart of the new rules. The treatment of the benefit in kind for an electric vehicle and the associated charging station is a major issue.

Provisions concerning the provision of an electric vehicle

• Before February 1, 2025: The calculation of the benefit in kind is subject to a 50% allowance (capped at €2,000.30).
• From February 1, 2025: The allowance increases to 70% (capped at €4,582) for eligible vehicles, which offsets the increase in the basic calculation rates.

Provisions concerning the provision of a charging station

The provision of charging stations will benefit from preferential treatment extended until the end of 2027.

1-Charging station installed at the workplace: The benefit resulting from the employee's use of the charging station for their personal vehicle is valued at €0, including electricity costs.

2-Terminal installed outside the workplace (employee's home):

• If the terminal must be returned at the end of the employment contract, there is no benefit.
• If the employer covers the cost of purchasing and installing a terminal that remains the property of the employee at the end of the contract, the benefit is limited to 50% of the actual expenses, up to a maximum amount (€1,043.50 for 2025).

Tax and social security implications

The vehicle benefit in kind is not neutral, either for the employer or for the employee.

• Social security contributions for the employer: The amount of the benefit is included in the social security contribution base. An increase in the benefit in kind therefore increases the overall cost of the employee to the company.
• Taxable income for the employee: The amount of this benefit is added to the gross salary for the calculation of income tax. It must appear on the pay slip.

Dadycar: Your partner for optimized fleet management in 2025

Navigating the complex rules governing benefits in kind, especially with the changes coming in 2025, can quickly become a headache for a company. Calculating the benefit, optimizing the total cost of ownership (TCO) of vehicles, and complying with legal obligations are ongoing challenges.

This is where Dadycar comes in as your strategic partner. Our expertise in fleet management allows you to:

• Simplify calculations: We help you choose the most relevant assessment method (flat rate or actual expenses) and automate calculations for each employee and vehicle.
• Optimize overall annual costs: Our analysis takes all parameters into account (purchase or rental price, maintenance, insurance, taxation, benefits in kind) to help you control the overall cost of your fleet.
• Accelerate the energy transition: We guide you in choosing electric vehicles, managing charging stations, and applying tax and social benefits for a successful and profitable transition to electric.
• Ensure compliance and safety: With Dadycar, you can be sure that you are complying with the latest regulations, including the new rules applicable since February 1, 2025, while enhancing the safety of your employees.

By entrusting the management of your fleet to Dadycar, you transform an administrative constraint into a performance lever for your company.

 

Frequently Asked Questions (FAQ)

What will be the amount of the benefit in kind in 2025?

The amount of the benefit in kind depends on many factors: the purchase or rental cost of the vehicle, its age, its energy source (combustion engine or electric), whether the employer covers fuel costs, and, above all, the date on which it was made available. For vehicles made available from February 1, 2025, the flat rates have increased, for example from 9% to 15% of the purchase price for a thermal vehicle less than 5 years old.

How do I report benefits in kind?

The employer must calculate the amount of the benefit in kind and include it on the employee's pay slip. This amount is subject to social security contributions for the company and income tax for the employee.

What are the penalties for non-disclosure?

In the event of an URSSAF audit, failure to declare or underreporting of a vehicle benefit in kind will result in an adjustment of social security contributions, accompanied by late payment penalties. The employer must be able to justify the calculation method used.

Can I deduct expenses related to my company car?

No, in principle, an employee who has a company car and whose expenses are covered by the employer cannot deduct additional professional expenses for commuting between home and work. The benefit in kind already covers this use