Estimate the 2026 benefit in kind for an electric, plug-in hybrid or combustion vehicle, then measure its impact on annual take-home pay.
Company car · Luxembourg 2026
Calculate the taxable benefit, then compare annual take-home pay with and without a company car.
Quick examples
Transparent benefit and impact
The calculator applies the 2026 flat rate to the VAT-inclusive new value including options and after any dealer discount. For a fixed lease contribution, only the deductible amount, capped at 20% of the remaining employer cost, reduces the taxable benefit.
Two runs of the 2026 salary engine isolate additional contributions and estimated tax. Employer budget adds the entered vehicle cost and employer contributions linked to the benefit, after the employee contribution.
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Understand the calculation
Private use of a car provided by an employer is a taxable benefit in kind subject to social contributions. The flat-rate method starts from the vehicle’s new value including options and VAT, after any dealer discount.
| Vehicle | Condition | Monthly rate |
|---|---|---|
| 100% electric | Consumption ≤ 18 kWh/100 km | 0.5% |
| 100% electric | Consumption ≤ 20 kWh/100 km and power ≤ 150 kW | 0.5% |
| 100% electric | Other electric configuration | 0.6% |
| Plug-in hybrid | 2026 applicable regime | 2.0% |
| Combustion and other | Petrol, diesel, non-plug-in hybrid, etc. | 2.0% |
Flat rate: the vehicle’s catalogue value is multiplied by the monthly rate. Logbook: actual cost per kilometre is applied to private kilometres, determined by subtracting business travel from total mileage.
The calculator automates the flat-rate method. The logbook method requires the employer’s actual costs and mileage records.
Use the vehicle’s new value including VAT and options, after any dealer discount. The same original base continues for a used vehicle; it is neither the current market value nor the monthly lease payment.
The current scale through 31 December 2026 applies 0.5% or 0.6% to fully electric cars depending on efficiency, and 2% to plug-in hybrids and other powertrains. Certain lease contracts signed by the end of 2024 for cars registered by 31 December 2025 may retain transitional rates linked to CO₂ and powertrain.
| Situation | Possible 2026 rate | Calculator setting |
|---|---|---|
| Electric · current regime | 0.5% or 0.6% | Automatic 2026 scale |
| Plug-in hybrid · current regime | 2% | Automatic 2026 scale |
| Combustion or other · current regime | 2% | Automatic 2026 scale |
| Contract / registration under former regime | 0.5% to 2% under retained rules | Confirmed custom rate |
The car’s model year alone is not enough. Check the lease contract, registration date and payroll rate before selecting a custom value.
The real monthly cost has three parts: the personal contribution withheld from take-home pay, additional employee social contributions and extra tax generated by the benefit. It therefore depends on salary and tax class, not only the car’s price.
1
Contractual amount paid directly by the employee.
2
The benefit enters the social base within the applicable limits.
3
The engine recalculates pay under the same 2026 tax model.
The employer budget is not limited to the taxable benefit. It may include leasing, insurance, servicing, tyres, administration and, depending on the car policy, fuel or charging. Employer social contributions on the benefit are added, while the employee contribution reduces the cost borne by the employer.
The employer result covers the lease payment entered, employee contribution and additional social charges. Add all other costs separately for a complete fleet budget.
These figures compare the gross benefit before any employee contribution. They are not the employee’s additional tax or final net cost.
| Catalogue value | Electric 0.5% | Electric 0.6% | Hybrid / combustion 2% |
|---|---|---|---|
| €40,000 | €200 | €240 | €800 |
| €50,000 | €250 | €300 | €1,000 |
| €75,000 | €375 | €450 | €1,500 |
In the Guichet.lu example, the gross benefit is €435, the lease payment €600 and the employee contribution €150. The deduction is capped at 20% × (€600 − €150), or €90. The taxable benefit is therefore €345, while the full €150 is still withheld from take-home pay.
Check the example on Guichet.luTaxable benefit = gross benefit − deductible employee contribution
For a fixed lease contribution, the deduction is the lower of the contribution and 20% of the employer’s remaining lease payment. The full contribution is still withheld from take-home pay.
The benefit is added to the tax and social bases but is not paid in cash. The employee therefore bears the additional contributions and estimated withholding, plus any contribution — not the full taxable value as a cash deduction.
Some older vehicles can retain a rate linked to registration or contract dates. In that case, select a custom rate only when it has been confirmed by the employer, payslip or authority.
To compare remuneration without a benefit, open the gross-to-net calculator. Gross-to-net salary calculator.
Private use is a benefit in kind added to the employee’s tax and social-contribution bases. The employer applies the resulting contributions and wage-tax withholding through payroll.
The net cost is the additional social contributions and tax generated by the benefit, plus any personal contribution withheld from take-home pay.
It depends on catalogue value, benefit rate, salary, tax class and employee contribution. The calculator compares annual net pay with and without the car, then divides the difference by twelve.
Under the flat-rate method, multiply the VAT-inclusive new value with options after discount by the applicable monthly rate. Then deduct only the fixed employee contribution allowed for tax purposes.
In 2026, eligible fully electric cars use a monthly rate of 0.5% or 0.6%, compared with 2% for plug-in hybrids and other powertrains under the current regime.
The employer normally signs and pays the lease. The employee may pay a fixed contribution, fuel or other costs depending on the car policy and employment agreement.
Yes. The taxable benefit is added to remuneration for tax and social-contribution calculations even though it is not paid in cash.
The full fixed contribution is withheld from take-home pay. For leasing, the amount reducing the benefit is capped at 20% of the employer’s remaining lease cost; variable running-cost contributions do not reduce it.
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