Company Car Benefit Calculator (Israel)
The number everyone looks up is the use value, but that isn't what you pay. The use value is added to your gross for tax purposes and never reaches your bank account — so the real cost is only the tax and National Insurance it triggers. Here you get both figures, and the difference between your net with the car and without it.
The car and the salary
The use value is set by the vehicle's list price, not by what was actually paid for it.
The manufacturer's list price for the model and year — not the deal price, not a second-hand price.
Calculated with the linear model, which applies to vehicles first registered from 2010: 2.04% of the list price, less a fixed reduction for hybrid (₪500.00) or electric (₪1,000.00) vehicles. Older vehicles use price groups and are not supported here.
Is giving up the car worth it?
If your employer offers a raise instead of the car, the right comparison is the monthly cost above against the cost of a private car: insurance, testing, servicing, fuel and depreciation. A company car is almost always cheaper — but not always.
An estimate. The rate and reductions are set in Income Tax regulations and are revised from time to time — confirm with a payroll professional or accountant before deciding.
An estimate only. The use-value rate and reduction amounts are set in Income Tax regulations and are revised periodically, and vehicles registered before 2010 use price groups not supported here. Confirm with a payroll professional before deciding.
How it works
- •Based on list price. Not the deal price, not a fleet discount, not second-hand value. A car bought at a steep discount carries the same use value as an identical one bought at full price.
- •The linear model applies from 2010. A fixed percentage of list price, regardless of how much you drive. Someone who drives rarely pays the full amount — this is not a benefit measured by use.
- •Hybrid and electric vehicles get a reduction. A fixed amount comes off the value before tax, which makes a green car cheaper on the payslip too, not just at the pump.
- •The real cost is a third to a half of the value. Because you pay tax on it at your marginal rate, not the amount itself. The higher your salary, the more the car costs you.
Frequently asked questions
How is the company-car use value calculated in Israel?
Under the linear model, which applies to vehicles first registered from 2010: a fixed percentage of the vehicle's list price, less a fixed reduction for hybrid or electric vehicles. The amount is added to gross salary on the payslip and taxed like any income.
What does a company car actually cost me per month?
Not the full use value, but the tax and National Insurance it adds — in practice a third to a half of the value, depending on your bracket. The reason is simple: the use value isn't money you received, only an amount added to the tax calculation.
Is it worth giving up a company car for a raise?
Compare the monthly cost shown here against a comparable private car: compulsory and comprehensive insurance, testing, servicing, repairs, fuel and depreciation. In most cases a company car still wins, especially for newer vehicles — but with a cheap car or very low mileage the picture can flip.
Does how much I drive matter?
No. The linear model ignores mileage and the split between business and private use. Someone driving 5,000 km a year pays exactly what someone driving 40,000 pays. This surprises a lot of people.
What about a car received mid-month?
The use value is pro-rated by the days the car was in your possession. The calculator supports a partial month, and the same applies to a car returned mid-month.
The car is only part of the expenses
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