Compare payrolling a benefit in kind versus the P11D route: per-payslip tax, employer Class 1A NIC (15%) and the collection timing difference.
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Shows what payrolling a benefit in kind means in practice (2025/26): the cash equivalent is added to taxable pay each period so the employee pays the income tax in-year — versus the P11D route where the same tax arrives about a year later through a tax-code adjustment. The employer pays 15% Class 1A NIC on the benefit either way, and payrolling becomes mandatory from April 2027.
£1,200 of private medical insurance for a basic-rate employee, monthly payroll: £100 added to each payslip, £20 of tax per month (£240/year), and £180 of employer Class 1A NIC.
Enter the annual cash equivalent of the benefit (e.g. medical insurance).
Set the employee's marginal tax rate and the pay frequency.
Read the per-payslip amounts and the employer Class 1A NIC.
Last data update
July 5, 2026
Sources and references
GOV.UK — Payrolling employees' benefits (gov.uk/guidance/payrolling-tax-employees-benefits-and-expenses-through-your-payroll); employer reporting expenses and benefits.
The data in this calculator is updated regularly to reflect the latest official rates. When in doubt, consult the official sources listed above.
The tax on the benefit is paid evenly in-year through PAYE instead of arriving as a tax-code adjustment the following year — same total, no year-end surprise.
No — the employer still files the P11D(b) and pays 15% Class 1A NIC on the benefits by 22 July, payrolled or not.
From April 2027 for most benefits in kind (per HMRC's announced timetable) — voluntary registration is open now and requires signing up before the tax year starts.