Company Car vs Cash Allowance Calculator
Compare the company car you can use with the cash you would actually keep. The calculation applies current company-car BIK percentages, PAYE, employee NI and HMRC optional-remuneration rules.
Use annual figures. Include lease, insurance, servicing and expected fuel or charging in the private-car cost.
Set to £0 for a tax-only comparison.
Only include a payment specifically required for private use, not fuel, insurance or a general lease contribution.
What cash allowance would match this car?
Uses everything above except the allowance, and finds the lowest yearly cash offer at which taking the cash is no worse than taking the car. It is a modelled break-even point, not a figure to ask for.
Enter your salary and the car’s list price first.
Explore EV salary sacrifice, private fuel, vans and employer reporting in the Company Car, Van & P11D hub.
What this comparison includes
Take the cash
The allowance is added to salary. The calculator measures the incremental Income Tax and Class 1 NI, then subtracts the private-car costs you enter.
Take the company car
The taxable benefit follows the current BIK table and, where relevant, the optional-remuneration cash-foregone rule. A qualifying payment required specifically for private use is deducted after that comparison, then included in your annual cash cost.
This is an employee tax comparison, not a quote for insurance, finance, maintenance or fuel. It does not model student-loan deductions on the cash allowance.
Worked example: the cash offer that matches a petrol company car
A £55,000 salary in England, a £35,000 petrol car at 150g/km, no private-use payment, and a £6,000 a year cost of running your own car instead (2026-27 rates).
- Break-even cash allowance: £1,655.10 a year.
- At that offer the allowance is worth £960 after Income Tax and NI, leaving the cash option at -£5,040 after the private car.
- The company car costs £5,040 in tax.
A lower cash offer leaves you better off taking the car. Run Find the break-even cash allowance above with your own salary, car and costs.
Frequently asked questions
Is a cash car allowance taxable in the UK?
Yes. A cash car allowance is normal employment income, so the employer deducts PAYE Income Tax and employee Class 1 National Insurance through payroll.
How is the company car side calculated?
The normal company-car benefit is the P11D list price multiplied by the appropriate percentage for its CO2 emissions, fuel type and tax year. Income Tax is charged on that taxable benefit; employee National Insurance is not normally charged on the benefit.
What are the optional remuneration rules?
If an employee can choose cash instead of a benefit, HMRC normally taxes the benefit on the higher of the normal cash equivalent and the cash foregone. Cars with CO2 emissions of 75g/km or less retain a specific exclusion and use the normal company-car benefit calculation.
Does the calculator include the cost of owning a private car?
Yes, if you enter it. Include lease or finance payments, depreciation, insurance, servicing, road tax and expected fuel or charging. Set it to zero if you only want to compare tax.