Car benefit: company or private car?

Should the company provide the car, or should you drive your own and get a mileage allowance? It depends on what the car costs, how much you drive for work and how much you drive privately. Here we go through how the car benefit is calculated in 2026, what it costs you and the company, and how to compare it with a private car.

What is a car benefit?

You have a car benefit when you as an employee may use the company's car privately to more than a minor extent. The limit is more than 10 occasions or more than 100 Swedish miles (1,000 km) a year, and trips between home and work count as private. The same rules apply whether the company owns or leases the car, and they also apply to you if you are employed by your own limited company.

The benefit is taxed as salary. You pay income tax on the benefit value and the employer pays employer contributions on it. If you drive privately less than the limit, you need to be able to show it, for example with a driving log.

How the car benefit value is calculated in 2026

The benefit value is a standard annual amount calculated in four parts:

• 0.29 price base amounts: 17 168 SEK, since the price base amount for 2026 is 59 200 SEK.
• 2.785 percent of the new car price. This part is based on the government borrowing rate on 30 November the year before, which was 2.55 percent.
• 13 percent of the new car price.
• The vehicle tax for the car.

Extra equipment is added to the new car price. The Tax Agency's example is a car for 300 000 SEK with 22 000 SEK of extra equipment, so 322 000 SEK, and 4 050 SEK in vehicle tax. The benefit value is 17 168 + 8 967 + 41 860 + 4 050 = 72 045 SEK a year, about 6 004 SEK a month.

Benefit value for an electric car

For electric and hydrogen cars that first became taxable after 30 June 2022, the new car price is reduced by 350 000 SEK before the benefit value is calculated. For plug-in hybrids the reduction is 140 000 SEK and for gas cars 100 000 SEK. The reduction may be at most half the new car price. Hybrids that cannot be plugged in and ethanol cars get no reduction.

Take an electric car with a new price of 600 000 SEK. Half is 300 000 SEK, so the price is reduced by 300 000 SEK. An electric car only pays the base vehicle tax, 360 SEK. The benefit value is 17 168 + 8 355 + 39 000 + 360 = 64 883 SEK a year, about 5 407 SEK a month. That is lower than for the car in the Tax Agency's example, even though the electric car costs almost twice as much.

Charging at a charging point the employer provides at the workplace can be tax-free, and from 1 July 2026 that exemption is permanent. Charging at home is not covered.

What does a company car cost?

The benefit value is added to your salary when the tax is calculated. With 32 percent tax, roughly the average municipal tax, you pay about 1 921 SEK a month for the car in the Tax Agency's example and about 1 730 SEK for the electric car above. If your salary is above the threshold for state income tax, the tax is higher on that part.

The company pays employer contributions on the benefit value, 31.42 percent for most employees. For the car in the example that is 22 637 SEK a year. On top of that, the company pays the car's costs, such as leasing or depreciation, insurance and servicing.

Two things can lower the benefit value:

• Net salary deduction: if you pay part of the car out of your salary after tax, the benefit value is reduced by the same amount. A gross salary deduction, before tax, does not reduce it.
• A lot of business driving: if you drive more than 3 000 Swedish miles for work during the year, the benefit value is reduced by 25 percent.

Fuel is not included in the benefit value. If the employer pays petrol or electricity for your private trips, that is a fuel benefit, valued at the market value times 1.2. If you drive the company car for work and pay the fuel yourself, the employer can reimburse you tax-free with 12 SEK per Swedish mile, or 9.50 SEK for a fully electric car.

A private car with mileage allowance

If you drive your own car for work, the employer can pay 25 SEK per Swedish mile tax-free in 2026. Anything paid above that is salary. You pay the rest of the car yourself, with money you have already paid tax on.

Work out your own driving with our mileage allowance calculator.

Company car or private car: how to compare

1. Work out the benefit value for the car you want and what it means in tax per month for you.
2. Work out what the same car would cost you privately per month: loan or leasing, insurance, tax, servicing and fuel for private trips.
3. Subtract the tax-free mileage allowance you would get for business trips in your own car, 25 SEK per Swedish mile.

What usually decides it:

• Electric car: the reduction can make the benefit value of an electric car lower than for a cheaper car without a reduction, as in the examples above.
• Cheap or paid-off private car: your own costs are low, and 25 SEK per mile for work can cover a large part of them.
• Little private driving: the benefit value is the same however little you drive privately, so you may pay tax on a car you rarely use.
• A lot of business driving: above 3 000 Swedish miles a year the benefit value is reduced by 25 percent.

A car in a limited company or sole trader business

Limited company. If you are employed by your own company, the same rules apply as for other employees. The company reports the benefit in the employer declaration and pays employer contributions on it. If you drive your private car for work, the company can pay 25 SEK per Swedish mile tax-free.

Sole trader. If the car is booked as an asset in the business or leased, you can deduct all running costs. If you drive it privately more than 10 times or more than 100 Swedish miles a year, the benefit value is taken up as income in the business, and you pay self-employment contributions on it. If the car is private and you drive it for the business, you deduct 25 SEK per Swedish mile.

VAT. VAT on buying a passenger car normally cannot be deducted. If the company rents or leases the car, it can deduct 50 percent of the VAT on the rent, provided the car is used more than 100 Swedish miles a year in the VAT-liable business. VAT on fuel, servicing and other running costs can be deducted in full when the car is an asset or rented for the business. Taxis, car rental and driving schools have their own rules.

Want help?

We work out the car benefit before the company gets a car, as part of our tax advice, and handle the benefit in the payroll through our payroll service. See all prices or request a quote below.

Sources

• Skatteverket: Amounts and percentages, income year 2026
• Skatteverket: Car benefit (for employers)
• Skatteverket: Car benefit (for individuals)
• Skatteverket: Benefit value for environmental cars
• Skatteverket: Fuel with a car benefit
• Skatteverket: Car costs
• Skatteverket: Withdrawals and benefits in a sole trader business
• Skatteverket: Cars and VAT
• Government bill 2021/22:173 on the reduced benefit value for environmental cars
• Transportstyrelsen: Vehicle tax amounts