Is a cash allowance taxed in Ireland?

A cash allowance is typically treated as pay through payroll, so it is generally subject to PAYE, USC and PRSI. The exact outcome depends on your payroll and year-to-date position.

Why can a company car reduce take-home pay?

A company car can create a taxable benefit (BIK). Payroll may treat that taxable value as notional pay, which can increase deductions.

How do I compare a cash allowance vs a company car fairly?

Compare both scenarios using the same salary and then evaluate net take-home as an estimate. Keep vehicle value, mileage assumptions, and the tax year consistent when comparing.

Cash allowance vs company car (Ireland)

Many offers look similar on the surface: a company car or a cash allowance. The correct comparison is usually not “gross value”, but “estimated net take-home impact”, using your own inputs.

Company car BIK tool Net salary tool Benefit in Kind (BIK)

1) Think in scenarios, not rules of thumb

A cash allowance is typically taxed as pay. A company car is typically taxed as a Benefit in Kind. Both can be sensible depending on OMV, business mileage, and your marginal position.

The most reliable approach is to model your own inputs and compare the estimated net outcome across the same tax year.

2) A simple comparison workflow

Calculate your baseline net salary with no car and no allowance.
Add the company car scenario and note the estimated BIK tax impact.
Add the cash allowance scenario and compare estimated take-home.
Switch years if offered an EV and you want a planning view.

3) Common pitfalls

Comparing gross allowance value to the sticker price of the car instead of net take-home.
Assuming mileage is fixed when it may change bands across the year.
Assuming EV rules are constant across years without checking the year-specific view.
Forgetting payroll differences (credits, basis, pension deductions) can change the result.

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