Skip to main content What are benefits in kind?
Definition of benefits in kind
Benefits in kind are non-cash rewards that an employee may receive from their employer.
An employee's reward package for doing their job will include a salary (money) and may also include a selection of benefits in kind.
Because the employee is receiving a benefit from their employer, they will often have to pay extra tax on the value of the benefit. The employer may also have to pay extra National Insurance to HMRC, as they would have done if they'd given the employee more cash instead of the benefit. The employer must tell HMRC about most benefits in kind that it provides for its staff, either by including the value of the benefit on the payroll, or by including the benefits on forms P11D. HMRC lays out rules for how it wants to hear about different benefits.
Example of benefits in kind:
Common benefits in kind include the use of a company car or van, private medical insurance paid for by the employer, and the employer helping the employee with the cost of relocating for work.
Disclaimer: The content included in this glossary is based on our understanding of tax law at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. You are responsible for complying with tax law and should seek independent advice if you require further information about the content included in this glossary. If you don't have an accountant, take a look at our directory to find a FreeAgent Practice Partner based in your local area.