PBIK – Allowance type settings.
With the introduction of Mandatory Payrolling Benefits in Kind (MPBiKs) which commences in April 2027, employers will be required to at least payroll the following benefits types:
- Company Cars and fuel
- Company Vans and fuel
- Medical benefits
Additionally employer may also voluntary payroll other benefits in kind including the new option from April 2027 of payrolling Loans and Accomodation.
Benefits Items and payroll allowance elements
To payroll benefits, the employer needs to assign a pay allowance element to each of their utilised benefits types. As a guidance suggestion, SD Worx recommends, for ease of identification, that allowances 800 and upwards are associated with payrolled benefit in kind.
Associated with that allowance, the appropriate benefits type indicator is to be set along with other control parameters for the associated Tax and National Insurance position.
All benefits in the list below which are payrolled must be set to be taxable.
Allowance Benefit Types
For any allowance used for the payrolling of benefits, the correct Allowance Benefit Type must be identified, the former voluntary Y classification will no longer be applicable.
For the April 2027 mandatory payrolling the types are:
| Benefit Type | Allowance Classification |
| Company Car | F |
| Company Car Fuel | FF |
| Company Van | G |
| Company Van Fuel | GF |
| Medical Benefits | I |
For the April 2027 non-mandatory items (some of these will become mandatory from April 2028)
| Benefit Type | Allowance Classification |
| Assets transferred: | |
| Cars | AX |
| Metals | AM |
| Property | AP |
| Other (the allowance descriptor may be used from April 2028) | AO |
| Payment on behalf of the employee: | |
| Accountancy | BA |
| Private Car | BC |
| Domestic bills | BD |
| Education | BE |
| Other (the allowance descriptor may be used from April 2028) | BO |
| Vouchers and Credit Cards | C |
| Living Accommodation | D |
| Mileage Allowance | E |
| Loans | H |
| Relocation Expenses | J |
| Services supplied | K |
| Assets Places at disposal | |
| Aircraft | LA |
| Boat | LB |
| Corporate Hospitality | LC |
| Holiday Accommodation | LH |
| Other (the allowance descriptor may be used from April 2028) | LO |
| Timeshare | LT |
| Other Items including Subscriptions professional fees, and other miscellaneous benefits | |
| Education Assistance | ME |
| Loans WO | ML |
| Nursery Places | MN |
| Other (the allowance descriptor may be used from April 2028) | MO |
| Subs or Professional Fees | MP |
| Non-qualifying relocation | MR |
| Stop Loss Charges | MS |
| Expenses Payment | |
| Entertainment | NE |
| Payment for use of home telephone | NH |
| Other (the allowance descriptor may be used from April 2028) | NO |
| Non-qualifying relocation | NR |
| Travel and subsistence | NT |
For any of the benefit types indicated above, they must also be set to be taxable as benefit in kind.
Special considerations are needed where the item is operated as a salary sacrifice negative allowance reduction as the settings will be different.
Appropriate SD Worx specialist assistance should be sought for guidance on the operation of salary sacrifice pay element.
Benefits and National Insurance
Benefits in kind are captured by National Insurance requirements.
Some benefits, such as credit cards or vouchers, where taxable are also subject to Class 1 National Insurance contributions (both employee and employer).
The majority of other benefits are subject to a Class 1A employer National Insurance charge.
For each benefit allowance, the employer is required to identify the applicable National Insurance associated with that benefit in kind.
The types available are:
- Yes – the item is subject to Class 1 National Insurance
- No – the items is not subject to any National Insurance
- Deemed – the items is for the payment of an IR35 amount which is subject to Class 1 National Insurance
- T/S Class 1A – the item is subject to Class 1A on termination payments and sporting testimonials
- BIK Class 1A – the item is subject to Class 1A on benefits in kind (new from April 2027)
The new option available for operation from April 2027 will now account for the Class 1A benefit charge instead of the employer having to file a P11Db from July 2028.
Payrolling Benefit In Kind – Data Collection Items
The majority of values required by HMRC in relation to Benefit In Kind are entered against and calculated from data presented to the associated benefits Pay Allowance data item.
HMRC also required for some benefits, additional non-calculation reporting information which also is required to be provided.
Currently this relates to:
- Company Car reporting (existed since April 2018 but with 4 new data items from April 2027
- Private Medical cost (new from April 2027)
- Adjustments to Class 1A (new from April 2027)
The Company Car reporting values are covered elsewhere in this guidance.
Payrolling Benefits In Kind – Private Medical
As a general principle, the reported benefit amount will be calculated, accumulated and populated into the relevant benefit fields of the FPS automatically from Payment Allowance used to record Private Medical Benefits under Benefit category ‘I’.
In addition, the HMRC require employer to provide and report a new data items:
| Renewal Cost to the employer or Amount Forgone by the employee for Private Medical benefit | E179 |
Use E179 to enter the accumulated renewal cost of the PBIK Private Medical. This will be the accumulation of the annual premium, to be adjusted at any point of increase. It is not pro-rated to reflect the tax year, but to be the declared annual renewal point amounts across all medical benefits for the individual employee.
For example, if the employee has pay allowance for Private Medical Insurance, and another separate pay allowance for Private Dental Insurance the value entered against E179 is a single combined value at the start of payrolling and at each change point.
This data item is for PBIK (Payrolling Benefits In Kind) Medical Benefit processing.
Format nnnnnnnnnnn
Where nn is the employers cost or the amount foregone across the comnined medical benefit provided to that employee, values from 1 to 15 digits
nnnnnnnnnnn is the entered acccumulated renewal value of all Private Medical benefits in pence, up to 11 numeric characters. A negative value is not permitted.
If an entry already exists for this car reference number the relevant detail will be replaced. If an entry does not yet exist one will be created.
This is valid for UK payrolls only.
Example the entered and reported values of the private medical renewal is to be £1,650.00
E179 165000
Last updated 06/10/2026 (PSP)