Who this article is for:

  • Limited companies

Categories explained: Employee Medical

Your company may pay for the medical insurance of its employees. This is regarded as a benefit in kind (BIK) and your employee usually pays tax on the cost of the insurance premium.

What's included

Providing medical or dental treatment support.

Paying for insurance premiums for your employees.

What's not included

You don't have to pay or report anything on the following health benefits:

  • Salary sacrifice arrangements

  • Periodic medical checks or health screening

  • Eye tests

  • Glasses or contact lenses

  • Medical treatment outside of the UK

  • Medical treatment or insurance for work only

  • Medical treatment to help an employee return to work - up to £500

How is it taxed?

Your company can provide medical insurance to employees working abroad and claim tax relief for this, as well as an annual check-up. Otherwise, any contribution towards your employee's medical insurance is deemed a 'Benefit in Kind' (BIK) and the employee must pay personal tax on it. The company is also liable to make National Insurance Contributions at 13.8% on any BIK.

Tax tips

No benefit will arise on the annual eye and health checks, but the provision of health insurance is a benefit in kind.

Useful links

Claiming VAT on employee rewards and perks.

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