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Electric Company Car Benefit in Kind 2025: Calculation and Exemptions
27 sep 2025
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Electric Company Car Benefit in Kind: Calculation, Exemptions, and 2025 Updates
An electric company car can cost up to 50% less in benefit in kind than an equivalent thermal vehicle. But what exactly is a benefit in kind? It is the tax and social valuation of providing a company car for personal use, which is added to your salary and generates contributions. How is it calculated in practice?
For electric vehicles, the flat-rate method is applied (9% of the purchase price or 30% of the annual leasing cost), followed by a 50% reduction capped at €1,800/year. Between this reduction, exemptions on electricity, and the free provision of charging stations, businesses and their employees benefit from significant tax advantages until 2027. Let's break down these rules and opportunities together.
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What is the Benefit in Kind for an Electric Company Car?
The benefit in kind (BIK) represents the tax and social valuation of providing an electric vehicle by the employer to an employee. According to Article L.242-1 of the French Social Security Code, when a company provides a car for personal use, this constitutes additional remuneration. This amount is added to the gross salary, increasing social contributions and income tax for the employee.
The nature of this benefit fundamentally differs depending on the type of vehicle. For electric cars, a flat-rate reduction of 50% applies to the calculated BIK amount, up to a maximum of €1,800 per year, as specified in the Official Social Security Bulletin (BOSS). Initially planned until 2024, this measure has been extended until December 31, 2027. The new provisions confirm the government's intention to accelerate the electrification of company fleets.
This difference in tax treatment between thermal and electric vehicles profoundly changes the economic equation. For a €45,000 car, the annual savings reach €1,800 for the employee in benefit in kind, not to mention other peripheral advantages. The employer also benefits from the exemption of the company car tax and full VAT recovery for the purchase or lease of the electric vehicle.
Key points for your business:
50% reduction (max €1,800/year) until 12/31/2027
2025 mileage allowance: €0.05/km for electricity expenses
How to Calculate the Benefit in Kind for an Electric Car?
Two Evaluation Methods Recognized by URSSAF
The tax administration, according to the modalities defined in the BOSS, offers two approaches for evaluating the benefit in kind of electric vehicles provided to employees. The first method, known as the flat-rate method, is the most commonly used as it significantly simplifies the calculation of social contributions. For a vehicle purchased by the company, 9% of the total purchase cost (including VAT) is retained per year. For long-term leasing, the flat-rate calculation is 30% of the total annual cost, including rent, maintenance, and insurance.
The second method, actual evaluation, requires precisely accounting for each expense related to the vehicle: depreciation over five years (20% per year), insurance, maintenance, fuel, or electricity. This actual calculation approach, more administratively complex, can be advantageous for electric cars used little for personal purposes or for very high-end models where the flat rate becomes penalizing. The amount of actual expenses must be justified, and personal trips must be clearly identified in a logbook.
Simplified Calculation for Your Electric Vehicle:
Step 1: Vehicle price × 9% (purchase) or Annual cost × 30% (lease)
Step 2: Apply 50% reduction (capped at €1,800)
Step 3: Final annual BIK amount for the employee
Step 4: Divide by 12 to get the monthly amount on the payslip
Example of a Tesla Model 3 Purchased by a Company
Let's take the concrete example of a Tesla Model 3 purchased for €45,000 (including VAT) by the company for an employee. The flat-rate calculation of the benefit in kind gives a base of €4,050 per year (9% of the purchase price including VAT). The 50% reduction for electric vehicles is then applied to this amount, but limited to the cap of €1,800 set by regulations. The final benefit in kind is therefore €2,250 per year, or €187.50 per month on the payslip.
For a thermal vehicle of the same purchase value, the benefit in kind would be €4,050 per year, or €337.50 per month on the payslip. The difference of €150 per month represents substantial savings on the employee's social contributions. This saving is combined with other advantages specific to electric vehicles, particularly regarding the provision of charging stations and the reimbursement of electricity costs.
Calculation of BIK
BIK Calculation Step | Electric Vehicle | Thermal Vehicle |
|---|---|---|
Purchase cost (VAT included) | €45,000 | €45,000 |
Flat-rate calculation base (9%) | €4,050 | €4,050 |
Electric vehicle reduction | -€1,800 | €0 |
Annual Benefit in Kind | €2,250 | €4,050 |
Monthly amount on payslip | €187.50 | €337.50 |
Monthly savings for the employee | €150 | - |
The Specific Case of Long-Term Leasing (LLD) in Companies
Long-term leasing now represents more than 60% of company cars in French corporate fleets. For a Renault Megane E-Tech on a long-term lease at €600 per month all-inclusive (rent, maintenance, insurance), the calculation of the benefit in kind differs significantly. The total annual cost of €7,200 serves as the basis for the flat-rate evaluation. The 30% rate is applied to this total amount, i.e., €2,160, then the 50% reduction brings the benefit in kind down to €1,080 per year, or €90 per month.
This leasing formula offers a double advantage for the employer: full deductibility of lease payments in company expenses and full VAT recovery on electric vehicles. The employee benefits from a reduced benefit in kind and a vehicle that is always recent with included services. New leasing offers even include the installation and maintenance of charging stations at the employee's home, without this constituting an additional benefit in kind.
Tax Specificities of Electric vs. Thermal Vehicles for Businesses
Beyond the simple calculation of the benefit in kind, electric cars benefit from a particularly favorable tax ecosystem for businesses. The total exemption from the company car tax (TVS) represents an annual saving of €500 to €1,000 depending on the models and their purchase price. The 100% VAT recovery, impossible on thermal passenger vehicles, reduces the actual cost of acquisition or leasing by 20%.
Accounting depreciation is another major optimization lever in calculating the total cost for the company. While thermal vehicles emitting more than 60g of CO2/km have their depreciable base capped at €18,300, electric vehicles can be depreciated up to €30,000. For a €45,000 vehicle, this difference in limits generates a corporate tax saving of nearly €3,000 over the five-year depreciation period.
These cumulative advantages profoundly change the total cost of ownership of a company car in the corporate fleet. Reduced social contributions thanks to the reduction, the absence of TVS, and new government aids make electric vehicles particularly attractive for corporate fleets in 2025.
Employer/Employee Tax Advantages
Type of Advantage | For the Employer | For the Employee |
|---|---|---|
Tax Advantage | 100% recoverable VAT, Total TVS exemption, Depreciation up to €30,000 | 50% reduction on BIK (max €1,800/year) |
Social Advantages | Reduced social contributions, Enhanced CSR image | Savings on social contributions |
Practical Advantages | Full deduction of expenses, 25% tax credit for charging stations | Free home charging station, Exempt work electricity |
Annual Economic Impact | Optimized TCO by 20-30% over 4 years | Approximately €100/month net savings |
Charging Stations and Electricity: Exemptions in Force Until 2027
Provision of Charging Stations: No Benefit in Kind Until 2027
The provision of a charging infrastructure by the employer does not constitute a benefit in kind until December 31, 2027, regardless of its form. This exemption applies whether the charging station is installed at the employee's home, on the company parking lot, or accessible via a professional badge on public networks like Electra. The employer can therefore fully finance the installation of a reinforced socket or a wallbox at the employee's home without generating additional social contributions.
This measure represents a considerable advantage, given that a complete installation costs between €1,500 and €3,000 depending on the home configuration. The company can deduct these installation costs from its taxable income and benefit from a 25% tax credit capped at €500 per installed charging point. The employee thus has a practical charging solution without any impact on their payslip or the amount of their social contributions.
Treatment of Electricity Costs for Professional and Personal Trips
The issue of reimbursing electricity costs for trips is the subject of clear doctrine from URSSAF. When charging takes place at the workplace, no benefit in kind is constituted, even for electricity consumed during the employee's personal trips. This administrative tolerance greatly simplifies daily management and avoids complex calculations for allocating between professional and personal use.
For home charging, the employer has two options for reimbursing professional expenses. Reimbursement based on actual costs requires precise justification of electricity consumption related to professional trips, generally via a sub-meter or an evaluation based on kilometers traveled. Simpler still, the 2025 kilometer allowance of €0.05 per professional kilometer (compared to €0.04 in 2024) allows for reimbursement without detailed justification of electricity expenses.
Regulatory Changes 2025-2027: New Measures and Deadlines
The year 2025 marks an important step in the policy of encouraging the electrification of corporate car fleets. The maintenance of the flat-rate 50% reduction until December 31, 2027, offers welcome visibility to businesses. This regulatory stability allows for the serene planning of fleet renewals and the purchase of new electric vehicles over several years.
The new kilometer scale for electricity, increased from €0.04 to €0.05 per kilometer, better reflects the reality of public charging costs and the growing use of fast charging stations. This 25% increase facilitates the full reimbursement of actual expenses incurred by employees during their professional trips. The new provisions also provide for a simplification of the supporting documents to be provided for these reimbursements.
However, attention must be paid to the end of 2027 deadline. Without new legislative extension, all specific advantages for electric vehicles will disappear, directly impacting the calculation of the benefit in kind and social contributions. Discussions are underway at the European level to harmonize and perpetuate these measures until 2030, but nothing has been finalized yet. Companies therefore have every interest in accelerating their transition over the next three years to maximize the tax benefits on their vehicle fleet.
Optimization Strategies for Businesses and Employees
Winning Approach to Optimize Company Costs
Long-term leasing is emerging as the optimal solution for corporate electric vehicle fleets. Beyond preserving cash flow, it offers full deductibility of lease payments in company expenses and simplifies administrative management. Lessors now offer packages including the installation and maintenance of charging stations, transforming electric mobility into an all-inclusive service with controlled overall cost.
Installing charging stations on the company site offers multiple advantages beyond the 25% tax credit. It improves employer attractiveness and enhances the CSR approach with employees and customers. Employees particularly appreciate being able to charge during working hours, thus eliminating a major constraint of switching to electric. Providing charging stations at the workplace does not generate any additional benefit in kind until 2027.
The sustainable mobility package, which can be combined with the reimbursement of public transport, allows for even greater optimization. Up to €900 per year can be paid without social contributions or taxes to encourage alternative mobility. This envelope can finance personal recharges or complement the use of the electric company car, thereby reducing the overall cost for the employee.
Negotiation Levers to Maximize Employee Benefits
When negotiating their remuneration package, employees have every interest in favoring an electric vehicle over a thermal one for their company car. The annual savings of €1,800 on the benefit in kind is equivalent to a net salary increase of nearly €100 per month. This difference becomes a real negotiating argument, especially since social contributions are calculated on a reduced amount thanks to the reduction.
Requesting the installation of a charging station or a reinforced socket at home represents a significant additional advantage. With no impact on the calculation of the benefit in kind thanks to the new exemptions until 2027, it provides daily convenience and enhances the employee's property. Some employees even negotiate coverage of their public charging subscriptions, a particularly relevant argument for high-mileage drivers who combine professional and personal trips.
Practical Cases: From Salesperson to Company Director
The High-Mileage Salesperson Optimizes Reimbursements and BIK
Martin, a salesperson in the pharmaceutical industry, travels 40,000 kilometers per year, including 30,000 for professional purposes. His Peugeot e-3008 on a long-term lease costs his company €550 per month all-inclusive. The calculation of the benefit in kind is based on 30% of the total annual cost (€6,600), i.e., €1,980. After applying the flat-rate 50% reduction reserved for electric vehicles, he only bears €990 per year in BIK, or €82.50 per month on his payslip and in his social contributions.
For his 30,000 professional kilometers, Martin receives €1,500 in non-taxable kilometer reimbursement for electricity costs (30,000 km × €0.05). This amount largely covers his actual expenses, even when regularly using fast charging stations during his trips. His employer has also installed a charging station at his home without this constituting an additional benefit in kind, allowing him to start each morning with a full battery for his professional and personal trips.
The Director and Their Premium Vehicle: Maximum Fleet Optimization
Sophie manages an SME with 50 employees and has chosen a BMW iX purchased for €85,000 by her company. The base calculation of the benefit in kind reaches €7,650 per year (9% of the purchase price). The reduction for electric vehicles, capped at €1,800 according to regulatory limits, brings this amount down to €5,850 per year in BIK. Despite this high amount, she saves €1,800 per year compared to an equivalent BMW X5 thermal vehicle, thus reducing her social contributions.
Optimization does not stop there for the company. The TVS exemption saves an additional €1,000 per year on this company car. VAT recovery represents an immediate saving of €14,166 on the purchase price (€85,000 × 20/120). Depreciation based on €30,000 generates a higher tax deduction of €11,700 compared to the ceiling applicable to thermal vehicles. Overall, the apparent additional cost of the electric vehicle is largely offset by all the tax advantages.
Benefit in Kind: Pitfalls to Avoid
The question of applying the reduction to plug-in hybrids often arises when setting up a mixed fleet. The answer is clear according to the BOSS: only 100% electric vehicles, emitting 0 grams of CO2, benefit from the flat-rate 50% reduction on BIK. Hybrids, even high-performance ones with significant electric range, follow the standard regime for thermal vehicles in calculating the benefit in kind. This distinction clearly pushes companies towards all-electric for their vehicle fleet.
Justifying the professional versus personal use of the vehicle may seem complex, but several methods are accepted by URSSAF. The administration accepts paper logbooks, mobile kilometer tracking apps, or a conventional flat rate defined in the employment contract. For salespeople, a flat rate of 75% professional use is generally accepted without detailed justification. The key is consistency and regularity of tracking to avoid any adjustment to social contributions.
Cumulating different advantages poses no legal or tax problems. The reduction on the benefit in kind combines perfectly with the TVS exemption, VAT recovery on purchase or lease, exemption on charging stations, and the sustainable mobility package. This accumulation of advantages makes the electric company car particularly attractive until the 2027 deadline, allowing substantial overall savings for the company and the employee.
Turn Tax Advantages into Competitive Advantages with Electra
Electra supports businesses with over 500 ultra-fast charging stations in France and solutions perfectly adapted to the professional needs of vehicle fleets. Our constantly expanding network, with 2,200 stations planned by 2030 in Europe, ensures that your employees can charge with peace of mind during all their professional and personal trips.
Our preferential business rates start at €0.39 per kWh in France, with multi-driver cards for your entire fleet and centralized monthly billing, simplifying expense management. The management app allows you to track each vehicle's consumption in real-time and optimize charging costs. Discover our strategically located fast charging stations on major routes and business areas. With transparent rates tailored to corporate fleets and dedicated customer service, Electra becomes the ideal charging partner to maximize the benefits of your transition to electric company cars.
Written by Nicolas - Electric Mobility Expert at Electra
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