Personal vs Company Vehicle Simulator
Using your own car for work lets the company pay you €0.40 per kilometre free of IRS within the public-sector limit. A company car instead carries autonomous taxation of 8% to 32% of its running costs, depending on its price, and personal use becomes taxable income for the employee. Which costs less depends on mileage, price and engine type.
Compare the total cost of using your personal vehicle (paid per kilometre) with a company vehicle (subject to autonomous taxation and running costs) in Portugal in 2026.
Your own car, paid per kilometre
- Rate: public servants are paid €0.40 per km for their own car (Portaria 1553-D/2008; the 2010 cut to €0.36 was revoked by Article 17 of Law 82/2023). Private employers can pay the same amount free of IRS; only the part above the public-sector limit, or amounts paid without meeting its conditions, is taxable employment income (Article 2(3)(d) of the IRS Code).
- Company side: kilometre payments not billed to clients and not taxed as the employee's income bear 5% autonomous taxation (Article 88(9) of the Corporate Tax Code).
- Records: keep a log of each trip (date, route, kilometres and purpose) to support the payments.
A company car
- Autonomous taxation on depreciation, fuel, insurance, maintenance and other car costs: 8% (price below €37,500), 25% (€37,500 to below €45,000) or 32% (€45,000 or more) (Article 88(3) of the Corporate Tax Code); 2.5%, 7.5% and 15% for qualifying plug-in hybrids (Article 88(18)); fully electric cars only at 10% above the price limit set by ministerial order (Article 88(20)). The rates rise by 10 points in a tax-loss year (Article 88(14)).
- Personal use: when there is a written agreement assigning the car to an employee or manager, personal use is taxable employment income (Article 2(3)(b)(9) of the IRS Code), valued each year at 0.75% of the car's market value at 1 January per month of use (Article 24(5) and (7); market value per Portaria 383/2003). The costs of a car covered by that agreement are excluded from autonomous taxation (Article 88(6)(b) of the Corporate Tax Code).
Worked example
An employee drives 12,000 km a year for work in their own car: at €0.40 per km that is €4,800 a year, with 5% autonomous taxation for the company (€240) if the payments are within the rules above. A €40,000 company car with €8,000 of yearly costs would carry €2,000 of autonomous taxation (25%) on top of those costs. The simulator runs this comparison with your own figures, and the autonomous taxation simulator covers the other company expenses.
Frequently asked questions
How much can be paid per km in a personal car tax-free?
Up to €0.40 per km, the rate set for the civil service (Portaria 1553-D/2008). Anything above that limit is employment income subject to personal income tax (article 2(3)(d) of the Personal Income Tax Code).
What are the autonomous taxation rates for company cars?
For combustion passenger cars: 8% below €37,500, 25% from €37,500 to €45,000 and 32% from €45,000 (article 88(3) of the Corporate Tax Code). Qualifying plug-in hybrids and natural-gas cars pay 2.5%, 7.5% or 15% (article 88(18)). Fully electric cars pay 10% only if the acquisition cost exceeds €62,500 (article 88(20)). In a tax-loss year the rates rise by 10 percentage points (article 88(14)).
Is mileage paid for a personal car subject to autonomous taxation?
Yes. Compensation for trips in the employee's own car carries 5% autonomous taxation unless it is invoiced to clients, and except for the part taxed as personal income, i.e. anything above €0.40 per km (article 88(9) of the Corporate Tax Code).
Is personal use of a company car taxed?
Yes, when there is a written agreement assigning the car to the employee or manager. For income tax, the benefit in kind is 0.75% of the car's market value at 1 January (acquisition cost less the depreciation coefficient in Portaria 383/2003) for each month of use (article 24(5) and (7) of the Personal Income Tax Code); for Social Security the base is 0.75% of the acquisition cost per month (article 46-A of the Contributory Code). In return, that car's costs are excluded from autonomous taxation (article 88(6)(b) of the Corporate Tax Code).
When is a personal car better than a company car?
It depends on mileage, the car's value and engine type, and personal use. With low mileage, per-km reimbursement is usually cheaper; with high mileage and an electric car, a company car tends to pay off. The simulator compares both scenarios.