Living Accommodation Benefit Calculator 2026/27

The property's gross rateable value (as at 31 March 1990) or estimated annual market rent if no rateable value exists
Purchase price plus any improvements made by the employer. Enter the current market value if owned for more than 6 years.
HMRC official rate for 2026/27 is 2.25%. Update if using a different year.

How Living Accommodation Benefit Is Taxed

When an employer provides an employee with living accommodation, the employee is generally liable for income tax on the taxable value of that accommodation. The calculation has two parts:

The combined basic and additional charges form the total taxable benefit. The employee pays income tax at their marginal rate, and the employer pays Class 1A NIC at 13.8% on the same amount.

Cost of Property Threshold

If the employer has owned the property for more than six years when it is first made available to the employee, the market value at the date of first availability is used instead of the original cost. This prevents employers from holding old property at low book values to avoid the additional charge.

Frequently Asked Questions

How is living accommodation benefit taxed in the UK?

Employer-provided living accommodation is taxed as a benefit in kind. The taxable amount has two components: the basic charge (equal to the property's annual value or gross rateable value), and — for properties that cost the employer more than £75,000 — an additional charge calculated as (property cost − £75,000) × the official rate of interest (2.25% for 2026/27). The employee pays income tax on the combined basic and additional charges, and the employer pays Class 1A NIC at 13.8%.

What is the additional accommodation charge?

The additional accommodation charge applies when the cost to the employer of providing the property exceeds £75,000. It is calculated as: (cost of property to employer − £75,000) × the official rate of interest. For 2026/27, the official rate is 2.25%. For example, a property costing £200,000 would have an additional charge of (£200,000 − £75,000) × 2.25% = £2,812.50 per year.

When is employer-provided housing exempt from tax?

Living accommodation is exempt from benefit-in-kind tax in three circumstances: (1) where it is necessary for the proper performance of the employee's duties (e.g. a caretaker required to live on site); (2) where it is customary for that type of employment and aids the better performance of duties (e.g. a farm worker in a tied cottage); or (3) where there is a special security threat. Directors of close companies rarely qualify for these exemptions.

How do I calculate the rateable value for accommodation benefit?

The annual value used for the basic accommodation charge is the property's gross rateable value as it stood at 31 March 1990. If the property has no rateable value (e.g. built after 1990), HMRC allows you to substitute the annual rent that would reasonably be expected if the property were let at arm's length. You can find the historic rateable value for English properties via the Valuation Office Agency.

Does living accommodation benefit affect National Insurance?

Yes — employers pay Class 1A National Insurance at 13.8% on the taxable value of living accommodation benefits. This is reported on form P11D(b) and paid by 19 July (22 July for electronic payment) following the tax year end. Employees do not pay National Insurance on benefits in kind — only income tax is charged on the employee.