Vehicle benefit in kind 2026: scale, calculation and what employers need to know

Vehicle benefit in kind 2026: scale, calculation and what employers need to know

A vehicle benefit in kind is valued either on a flat-rate basis or on actual cost. For vehicles made available since 1 February 2025, the annual flat rate is 15% of the purchase cost for a vehicle five years old or less (10% beyond), and 50% of the total annual cost for a leased vehicle. Eligible electric vehicles qualify for a specific allowance, capped at €4,641.60 a year.

What is a vehicle benefit in kind?

When a company makes a vehicle available to an employee who may use it privately, on top of its business use, that employee receives a benefit in kind. The benefit must be valued, entered on the payslip and subjected to social security contributions and income tax, in the same way as remuneration. Two valuation methods exist: the flat rate, calculated as a percentage of the vehicle's cost, and valuation on actual expenditure.

Often treated as a payroll detail, this has in fact become a priority audit point for URSSAF, particularly since the scale increase of 2025. For a fleet manager handling several dozen company cars without a structured process, the cumulative financial exposure far exceeds that of any single vehicle.

What is the 2026 scale for a purchased vehicle?

The scale applicable to vehicles made available since 1 February 2025 distinguishes the vehicle's age and whether the employer covers the fuel. It remains in force in 2026.

Situation	Vehicle ≤ 5 years	Vehicle > 5 years
Fuel not covered by the employer	15% of the purchase cost	10% of the purchase cost
Fuel covered (actual expenditure)	15% of the purchase cost + actual fuel	10% of the purchase cost + actual fuel
Fuel covered (global flat rate)	20% of the purchase cost	15% of the purchase cost

The purchase cost retained is the price actually paid by the company, including tax. A second-hand vehicle therefore generates, at equal age, a proportionally smaller benefit in kind than a new one. The date of availability matters more than the date of purchase: a vehicle bought before 1 February 2025 but allocated after that date falls under the current scale.

What is the scale for a leased vehicle?

For a leased vehicle — long-term lease or lease with purchase option — the flat rate is calculated on the total annual cost of the lease, including maintenance and insurance:

Situation	Flat rate
Fuel not covered by the employer	50% of the total annual cost (lease, maintenance, insurance)
Fuel covered (actual expenditure)	50% of the total cost + actual fuel
Fuel covered (global flat rate)	67% of the total annual cost

It is the total annual cost that determines the benefit, not the monthly rental alone: companies negotiating lease contracts have every reason to document precisely what it covers, including maintenance and insurance.

What specific regime applies to electric vehicles?

For vehicles running exclusively on electricity and made available between 1 February 2025 and 31 December 2027, two advantages combine — subject to one condition that must not be missed.

The condition: the vehicle must meet a minimum eco-score, set out in point c of 6° of I of article D. 251-1 of the French energy code. An electric vehicle that does not reach that threshold qualifies for neither of the two allowances below.

For eligible vehicles:

• Electricity costs covered by the employer for charging are not included in the calculation, unlike fuel for a combustion vehicle.

• Valuation on actual cost: a 50% allowance, capped at €2,026.30 a year (value at 1 January 2026).

• Flat-rate valuation: a 70% allowance, capped at €4,641.60 a year (value at 1 January 2026).

This difference in treatment makes an electric company car markedly more advantageous for the employee than a combustion equivalent, at the same fleet budget. It is a concrete argument to build into the mobility policy when steering employees towards the energy transition, in line with the objectives of the LOM law. The groundwork is laid upstream, with the choice of charging stations and the tracking of real electric vehicle usage.

Has the scale changed compared with previous years?

Yes, substantially. The reform that came into force on 1 February 2025 raised the flat rates against the previous scale, and those rates are the ones that apply in 2026:

Situation	Before 1 February 2025	Since 1 February 2025
Purchased vehicle, ≤ 5 years, no fuel	9% of the purchase cost	15% of the purchase cost
Purchased vehicle, > 5 years, no fuel	6% of the purchase cost	10% of the purchase cost
Leased vehicle, no fuel	30% of the total annual cost	50% of the total annual cost

Six points more for a recent purchase, twenty for a lease: at an identical vehicle cost, the valued benefit rises mechanically, and with it the social contributions and income tax due. For a company that has not revisited its company car policy since 2024, the gap can represent several hundred euros a year per vehicle — a line that weighs on the total cost of ownership.

How to calculate a vehicle benefit in kind in practice

Combustion vehicle bought for €30,000 including tax, three years old, fuel not covered.

Annual benefit in kind = €30,000 × 15% = €4,500, or €375 a month to enter on the payslip and subject to social contributions and income tax.

Eligible electric vehicle, leased, total annual cost of €8,000, flat-rate valuation.

Benefit before allowance = €8,000 × 50% = €4,000. After the 70% allowance (within the €4,641.60 cap), the benefit retained falls to €1,200, or €100 a month.

Why is the benefit in kind a risk point for employers?

An incorrect or missing valuation exposes the company to a URSSAF reassessment covering every company car concerned, retroactively over several years if the anomaly is not spotted quickly.

The most frequent audit points concern the updating of the purchase or lease cost retained, the correct application of the five-year age threshold, and the traceability of genuinely private use when the employer argues that no benefit in kind arises. A reliable mileage record and fuel consumption tracking serve that demonstration directly.

How Dadycar helps secure benefit-in-kind calculations

Dadycar centralises, for each vehicle in the fleet, the data needed for the calculation: purchase cost or total lease cost, age, powertrain and any employer-covered fuel. The benefit-in-kind report, included from the Fleet plan, makes it easier to hand that information to HR and payroll teams; the calculation and declaration remain the responsibility of payroll. Tracking the electrification of the fleet, already useful for LOM law compliance, also helps anticipate the effect of the electric allowance on the company car policy.

Frequently asked questions

Is a benefit in kind due as soon as an employee has a company car?

It is due as soon as the vehicle may be used privately, including at weekends and during holidays, and not only for business journeys. A vehicle strictly reserved for business use — a service vehicle — does not give rise to a benefit in kind if it cannot be used privately.

Can the valuation method be changed during the year?

No. The method chosen, flat rate or actual cost, applies identically for the whole calendar year for a given employee and vehicle, except where the vehicle changes during the year.

Do all electric vehicles qualify for the allowance?

No. The 50% or 70% allowance is reserved for electric vehicles meeting the minimum eco-score set by article D. 251-1 of the energy code. The condition is checked on the day the vehicle is made available to the employee.

Are charging costs for an electric vehicle a separate benefit in kind?

No. Unlike fuel for a combustion vehicle, electricity costs for charging are not included in the calculation, whether charging takes place at the employee's home or on a company charging point.

Who values the benefit in kind: the employer or the employee?

Valuation and entry on the payslip fall to the employer, who also bears the risk in the event of an error during a URSSAF audit.

Does the scale increase apply to vehicles already on the road?

It applies to vehicles made available from 1 February 2025. A vehicle allocated before that date remains subject to the scale in force when it was made available — but a vehicle bought before and allocated after does fall under the new scale.

How is the purchase cost determined for a second-hand vehicle?

The flat rate is calculated on the price actually paid by the company, including tax, not on the list price of the vehicle when new.