Ireland BIK A1 Category 2026: How to Pay Only 6% BIK on Y...

Ireland's Budget 2026 introduced significant changes to company car taxation, with a new A1 category offering just 6% Benefit-in-Kind rates for low-emission vehicles. This represents a major incentive for company car drivers to choose electric or plug-in hybrid vehicles, substantially reducing their tax liability while enjoying the latest in automotive technology.

Understanding Ireland's BIK System

How BIK is Calculated

Benefit-in-Kind on company cars is calculated as:

BIK Value: Original Market Value (OMV) × BIK percentage
Tax Liability: BIK Value × Your marginal tax rate
Lower of: OMV or market value at end of year

BIK Categories by Emissions

Category	CO2 (g/km)	BIK Rate
A1 (NEW)	0-60	6%
A	61-80	8%
B	81-100	9%
C	101-120	10%
D	121-140	12%
E	141-155	14%
F	156-170	16%
G	171-190	20%

A1 Category Savings Examples

Electric Vehicles

Tesla Model Y Long Range (€60,000 OMV, 0g/km)

A1 BIK Rate: 6%
BIK Value: €3,600
Tax at 40% rate: €1,440/year
vs equivalent diesel (Category F): €9,600/year BIK tax
Annual saving: €8,160

Hyundai Ioniq 5 (€55,000 OMV, 0g/km)

A1 BIK Rate: 6%
BIK Value: €3,300
Tax at 40% rate: €1,320/year
vs petrol equivalent (Category C): €5,500/year BIK tax
Annual saving: €4,180

Business Mileage Reduction

High Mileage Discount

Drivers with significant business mileage qualify for reduced BIK:

32,000+ km/year: 20% reduction in BIK value
24,000-31,999 km/year: 10% reduction in BIK value
Below 24,000 km/year: No reduction

Combining A1 category with maximum mileage reduction: 6% × 0.8 = 4.8% effective BIK rate

The Bottom Line

Ireland's new A1 BIK category offers exceptional value for company car drivers. With just 6% BIK rates for electric and low-emission vehicles, switching to an EV company car can save thousands of euros annually compared to conventional vehicles. For Irish company car drivers, 2026 represents an excellent opportunity to benefit from green taxation incentives while enjoying lower running costs and cutting-edge technology.

Questions

What is Ireland's new A1 BIK category?

Ireland's Budget 2026 introduced a new A1 BIK category for company cars with CO2 emissions of 0-60g/km. Vehicles in this category attract a Benefit-in-Kind rate of just 6%, significantly lower than standard BIK rates. This change aims to incentivise low-emission company cars, particularly plug-in hybrids and electric vehicles.

How much BIK do I pay on a company car in Ireland?

BIK rates in Ireland depend on CO2 emissions and original market value. The new A1 category (0-60g/km) pays only 6% BIK. Standard categories range from 8% to 37% based on emissions. The BIK value is calculated as OMV × BIK percentage, then added to your taxable income.

Which vehicles qualify for the 6% A1 BIK rate?

Vehicles with CO2 emissions of 0-60g/km qualify for the A1 category. This includes all-electric vehicles (0g/km), plug-in hybrids with low emissions, and some mild hybrids. The specific emissions figure is based on WLTP test results from the vehicle's certificate of conformity.

How much can I save with the A1 BIK category?

On a €50,000 electric vehicle: A1 rate (6%) = €3,000 BIK value vs standard rate (10%) = €5,000 BIK value. The 4% difference saves €2,000 in BIK liability annually. For a higher-rate taxpayer (48.5%), this translates to approximately €970 in annual tax savings.

Does business mileage affect BIK rates?

Yes, reduced BIK rates apply for high business mileage users. If you travel over 32,000 km annually for business, you may qualify for a 20% reduction in the BIK value. This can stack with the A1 category for even lower BIK liability. Records of business travel must be maintained.