Company car and benefit in kind 2026: calculation

Your employee gets a company car. Nice. Then the maths begins. Because that car isn't "free": not for you as the employer, and not for your employee either. The tax authorities treat the private use of a company car as a salary benefit. And that company car benefit in kind (BIK) has to be calculated correctly. Get it wrong? Then someone pays too much or too little tax.

In this article, you'll find out exactly how the benefit in kind for company cars is calculated in 2026. With the current formula, the new CO2 reference emissions, concrete worked examples and the pitfalls we run into most often in practice.

What is the benefit in kind for a company car?

The benefit in kind is the taxable value the tax authorities assign when an employee is allowed to use a company car privately too: weekends, holidays, the commute. Officially, in Belgium this is called a "voordeel alle aard" (VAA).

This benefit is added to your employee's taxable income. In practice: your employee pays tax on it through personal income tax, even though they receive no extra cash. It's a notional amount the government calculates based on the car itself.

For you as the employer, it's important to put this on the payslip correctly. And to understand which costs you carry on top of it (think of the solidarity contribution, but more on that later).

The formula: calculating the company car BIK

The company car BIK comes down to one base formula:

BIK = catalogue value x 6/7 x CO2 percentage x age coefficient

Four elements, that's it. This gets a little technical, but not complicated, promise. Let's walk through them one by one.

Catalogue value

This is the official new price of the vehicle, including VAT and options. Not what you paid for it, not the second-hand price, but the list price at the moment the vehicle first came on the market as new.

Why multiply by 6/7? The legislator assumes a company car isn't used 100% privately. That 6/7 correction (roughly 85.7%) takes this into account.

CO2 percentage

The CO2 percentage drives a large part of your BIK. The base rate is 5.5%, and it applies when your car's CO2 emissions are exactly equal to the reference emissions.

For every gram of CO2 per kilometre above the reference, the percentage rises by 0.1%. For every gram below it, it drops by 0.1%.

The percentage always stays between a minimum of 4% and a maximum of 18%.

Age coefficient (degressivity)

A company car loses value over time, and the tax authorities account for that with an annual reduction on the catalogue value:

• Year 1 (0-12 months after first registration): 100%
• Year 2: 94% (minus 6%)
• Year 3: 88% (minus 12%)
• Year 4: 82% (minus 18%)
• Year 5: 76% (minus 24%)
• Year 6 and later: 70% (the floor, it can't go lower)

That 70% is the floor. Even a ten-year-old car is still calculated at 70% of the catalogue value.

CO2 reference emissions 2026: the figures

Every year the government publishes new reference emission values, based on the average CO2 emissions of newly registered cars the year before.

For 2026, these reference values apply:

• Petrol, LPG and natural gas: 70 g/km
• Diesel: 58 g/km

For comparison, in 2025 that was 67 g/km for petrol and 57 g/km for diesel. So the reference values have barely dropped. That's because the number of newly registered electric cars has stagnated, so the fleet average is hardly falling.

What does that mean in practice? For most fossil-fuel company cars, the benefit in kind in 2026 stays roughly the same as in 2025. If you drive a car with relatively low CO2 emissions, your BIK might even rise slightly, because the reference value is lower.

Worked example: company car BIK 2026, step by step

Let's put the formula to work. Say your employee drives a petrol car. The details:

• Catalogue value: 35,000 euro (incl. VAT and options)
• CO2 emissions: 120 g/km
• First registration: March 2024 (so in year 2 in 2026)

Step 1: adjust the catalogue value for age

The car is in its second year, so 94%: 35,000 x 94% = 32,900 euro

Step 2: the 6/7 correction

32,900 x 6/7 = 28,200 euro

Step 3: determine the CO2 percentage

The reference for petrol in 2026 is 70 g/km. The car emits 120 g/km. Difference: 120 - 70 = 50 g/km above the reference. CO2 percentage: 5.5% + (50 x 0.1%) = 5.5% + 5% = 10.5%

Step 4: calculate the BIK

28,200 x 10.5% = 2,961 euro per year

That's the amount that appears on your employee's payslip as a taxable benefit. Per month, that's 246.75 euro.

Second example: a fuel-efficient diesel

• Catalogue value: 42,000 euro
• CO2 emissions: 95 g/km (diesel)
• First registration: January 2023 (year 4 in 2026)

Age coefficient: 82% 42,000 x 82% = 34,440 euro 34,440 x 6/7 = 29,520 euro

CO2 percentage: 95 - 58 = 37 g/km above the reference 5.5% + (37 x 0.1%) = 5.5% + 3.7% = 9.2%

BIK = 29,520 x 9.2% = 2,715.84 euro per year (226.32 euro per month)

The minimum benefit: watch out with low emissions

Even with an extremely fuel-efficient car whose CO2 percentage lands on the minimum of 4%, an absolute minimum amount applies. For income year 2026, the minimum benefit in kind is 1,600 euro on an annual basis (subject to indexation: the exact amount will be confirmed later, but 1,690 euro is expected as an indicative figure).

In practice, this means employees with a very fuel-efficient fossil-fuel car or a plug-in hybrid sometimes land on that minimum. The BIK can never be lower, no matter how little the car emits.

Electric company cars and the benefit in kind

A fully electric car has 0 g/km CO2 emissions. So how does the BIK calculation work then?

The CO2 percentage is calculated against the petrol reference (70 g/km in 2026): 0 - 70 = -70 g/km below the reference 5.5% - (70 x 0.1%) = 5.5% - 7% = -1.5%

But the minimum is 4%. So for an electric car, the minimum percentage of 4% always applies.

A concrete example with an electric car:

• Catalogue value: 50,000 euro
• CO2 emissions: 0 g/km
• First registration: September 2025 (year 1 in 2026, no reduction yet)

50,000 x 100% = 50,000 euro 50,000 x 6/7 = 42,857 euro 42,857 x 4% = 1,714.28 euro per year (142.86 euro per month)

That's noticeably lower than for a fossil-fuel car with a comparable catalogue value. And that's exactly why an electric company car stays tax-attractive for the employee.

But watch out: the minimum benefit applies here too. If the calculation came out below the minimum amount (an indicative 1,690 euro in 2026), it's raised to that minimum.

The solidarity contribution: what you pay

On top of the BIK on your employee's payslip, you as the employer pay a monthly CO2 solidarity contribution to the NSSO. These two amounts are often confused, but they're very different things.

The BIK is a tax benefit for the employee. The solidarity contribution is a social security contribution you pay as the employer.

How is the solidarity contribution calculated?

The formula depends on the fuel type:

• Petrol: [(CO2 x 9 euro) - 768] / 12 x index coefficient
• Diesel: [(CO2 x 9 euro) - 600] / 12 x index coefficient

The index coefficient for 2026 is 185.85 / 114.08 = 1.6292 (indicative).

Minimum contribution 2026

A minimum contribution applies, and since 2023 this has become a bit more complex:

Cars ordered or leased before 1 July 2023: Minimum 33.93 euro per month (2026, indicative)

Cars ordered or leased from 1 July 2023 onwards: Minimum 42.34 euro per month (2026, indicative). On top of that, the calculated contribution is multiplied by a factor that rises every year. From 1 January 2026, that multiplier is 4.

That's a steep increase. For comparison: in 2025 the factor was 2.75. This higher multiplier mainly hits fossil-fuel cars ordered after 1 July 2023.

Electric cars and the solidarity contribution

Fully electric cars only pay the minimum contribution. The multiplier doesn't apply to zero-emission cars. In concrete terms, for an electric company car you pay, as the employer, an indicative 33.93 euro per month in 2026 (for cars ordered before 1 July 2023) or 42.34 euro per month (ordered after 1 July 2023).

After more than 15 years in Belgian payroll, we see many employers underestimate the solidarity contribution when budgeting for their fleet. It's a recurring monthly cost you absolutely need to factor into your total cost of ownership.

The personal contribution: lowering the BIK

Your employee can lower the taxable benefit in kind by paying a personal contribution. It works simply: the amount the employee contributes themselves is deducted from the calculated BIK.

Say the BIK is 2,961 euro per year and the employee pays 100 euro per month as a personal contribution (1,200 euro per year), then the taxable benefit becomes: 2,961 - 1,200 = 1,761 euro.

Important: the personal contribution can reduce the BIK to zero, but never make it negative. Too high a personal contribution brings no tax benefit. You simply lose that "surplus".

This is something the employers we support regularly get questions about. Processing the personal contribution correctly on the payslip is crucial, because mistakes here lead to a wrong calculation of the professional withholding tax.

Tax impact for the employee: what does it cost?

The company car benefit in kind is taxed at the employee's marginal rate in personal income tax. Belgium has progressive rates, so the rate depends on total taxable income.

A rough estimate for 2026 (the personal income tax rates):

• Up to 15,820 euro: 25%
• From 15,820 to 27,920 euro: 40%
• From 27,920 to 48,320 euro: 45%
• Above 48,320 euro: 50%

Most employees with a company car sit in the higher brackets. Take the petrol car example with a BIK of 2,961 euro: an employee in the 50% bracket effectively pays about 1,480 euro extra tax per year. That's around 123 euro per month.

Compare that with the advantages of a company car (no purchase price of your own, no insurance, no maintenance, no fuel costs) and you understand why the company car is still so popular in Belgium. Even with the BIK on top, for most employees it's a lot cheaper than buying a car themselves.

Want to know exactly how much your employee keeps net? Take a look at our article on gross-to-net calculation for a complete overview.

Company car TCO: the full picture for employers

As an employer, you're best off looking at the total cost of ownership (TCO). That's more than just the leasing price. The total cost of a company car includes, among other things:

• Leasing or purchase cost
• Fuel or electricity
• Insurance
• Maintenance and tyres
• CO2 solidarity contribution (monthly, to the NSSO)
• Non-deductible VAT (depending on the type of car)
• Disallowed expenses in corporate income tax

The tax deductibility of car costs also depends on the CO2 emissions. The higher the emissions, the lower the percentage you can deduct in corporate income tax. Fully electric cars are currently still 100% deductible (though that percentage is being gradually reduced for new orders).

Want to know more about how to calculate the full wage cost of an employee, including the extra costs of a company car? Then read our guide on calculating wage cost.

Common mistakes when calculating the BIK

We regularly see companies make the same mistakes. The five most common:

Using the wrong catalogue value. It's not the purchase price that counts, but the official list price including VAT and options. For a second-hand car, that's the new price of the model, not what you paid for it.

Forgetting the age coefficient or calculating it wrong. The reduction only starts after the first full year. And the minimum is 70%, not 0%. A seven-year-old car is still at 70%.

Not accounting for the personal contribution. If your employee pays a personal contribution, you have to deduct it from the BIK. Forget that, and your employee pays too much tax.

Not updating the CO2 reference. The reference values change every year. Anyone who copy-pastes last year's calculation without filling in the new reference gets it wrong.

Confusing NEDC and WLTP. Newer cars often have a WLTP value that's higher than the old NEDC measurement. Which value you must use depends on what's on the registration certificate. If both are available, you may use the lower one.

You can keep track of all this yourself in a spreadsheet, or you can have the payroll handled by a specialised payroll partner. At Recruit, the benefit in kind is calculated automatically based on the current parameters, so your payslip is always right.

Frequently asked questions

How is the company car benefit in kind calculated? With the formula: catalogue value x 6/7 x CO2 percentage x age coefficient. The CO2 percentage depends on your car's emissions relative to the reference emissions. That reference changes every year.

What are the CO2 reference emissions for company cars in 2026? For petrol, LPG and natural gas cars it's 70 g/km. For diesel cars, 58 g/km. These values have dropped slightly compared to 2025.

What is the minimum benefit in kind in 2026? The minimum amount is an indicative 1,690 euro on an annual basis (subject to official confirmation). Even if the calculation comes out lower, the BIK is raised to this minimum.

As an employer, do I also pay something on top of the BIK? Yes. As the employer, you pay a monthly CO2 solidarity contribution to the NSSO. It depends on the fuel type, the CO2 emissions, and when the car was ordered. For cars ordered after 1 July 2023, a multiplier of 4 has applied since 2026. Read more about NSSO contributions in our article on calculating NSSO contributions.

Is an electric company car more tax-efficient? For the employee, yes. The BIK is lower because the CO2 percentage lands on the minimum of 4%. For the employer, the solidarity contribution is limited to the minimum amount. The corporate tax deduction is currently more favourable too. But the higher catalogue value of electric cars sometimes offsets part of that advantage.

Can my employee lower the BIK? Yes, by paying a personal contribution. It's deducted from the calculated BIK. This way the BIK can drop to zero, but never become negative.

In short

Calculating the company car benefit in kind isn't rocket science, but there are plenty of details you can easily trip over. Catalogue value, CO2 reference emissions, age reduction: every part has to be right. And then, as an employer, you also have the solidarity contribution you pay to the NSSO every month.

The key points at a glance: the CO2 reference for 2026 is 70 g/km (petrol) and 58 g/km (diesel). The multiplier for the solidarity contribution rises to 4 for cars ordered after 1 July 2023. And electric cars remain the most tax-efficient, both for employee and employer.

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How Recruit helps you here

No desire to puzzle over NSSO percentages and benefits in kind yourself? We get it.

With Recruit:

• Contracts in under 60 seconds: create trial and temp contracts without hassle
• Automatic payroll calculation: correct pay in line with current legislation and your Joint Committee
• Dimona (immediate employment declaration) and social documents: we handle all the declarations, you focus on your business
• 24/7 personal support: always a dedicated contact who knows your company
• No fixed monthly costs: pay only for what you use

Try Recruit or get in touch with our HR experts for tailored advice.

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The information in this article is purely informative and does not replace professional legal or accounting advice. Labour legislation and tax rules change regularly. The amounts and percentages mentioned are indicative for 2026 and may differ after indexation or legislative changes. Always consult the current legislation or contact an HR expert for advice tailored to your situation.