Private use of company cars

Ready reckoners

A Ready Reckoner is a tool to assist you in calculating the cash equivalent of a company car for each pay period. There is no obligation to use the Ready Reckoner if you are using another method to calculate this amount.

Using the Ready Reckoner should ensure that the correct amount is taken into account for PAYE, PRSI and USC in a year. The Ready Reckoner can help you regardless of:

  • when in the year the car is available
  • how long the car is available for.

How to use the Ready Reckoners

There are separate reckoners for:

Headings in the Ready Reckoners
Cumulative kilometres

Total business kilometres driven in a car at a specific period in time

(such as the total kilometres driven by the end of Week 1 or Month 1 of the year)

Cumulative OMV x relevant %

The percentage of OMV of the car to use to calculate the cash equivalent for a pay period.

If your employee is paid weekly, then Week 1 on the reckoner is the first pay period they had the car.

If your employee is paid monthly, then Month 1 on the reckoner is the first pay period they had the car.

If your employee is paid fortnightly, Week 2 on the reckoner is the first pay period they had the car. Week 4 will be the second pay period, and so on.

If your employee receives a car during the year, the first pay period of ownership is Week 1 or Month 1 in the reckoner. You may need to make a pro-rata adjustment to the cash equivalent if they receive the car during the pay period.

If your employee returns the car during a year, you ignore future pay periods as the car was not available to them. You may need to make a pro-rata adjustment to the cash equivalent if they returned the car during the pay period.

If your employee goes abroad for work and cannot use the car, no BIK arises. You should ignore the weeks they are abroad. For example, if they are away for July on business, do not count July as Month 7 on the reckoner. Month 7 would be August.

If your employee pays you to use the car, you need to deduct these payments from the cash equivalent.

Car changed during the year

Where your employee changes car in a year, the first pay period of ownership is decided by the rules above. You may need to make a pro-rata adjustment to the cash equivalent if they change the car during a pay period.