Company car fringe benefit rental: 2025 guide

The company car fringe benefit is the value of the economic advantage an employee receives when they use a company-provided car for personal use as well. In long-term rental, the car remains registered to the rental company and the company pays a monthly fee; the employee's fringe benefit, however, does not depend on the monthly fee: it is calculated using the criteria set by current legislation, based on the ACI tables of cost per kilometre. In this guide we look at how it works, what changes between mixed use and exclusive use and why rental is often the simplest solution to manage.

What the company car fringe benefit is and when it applies

The term *fringe benefit* refers to any good or service provided by the company to the employee in addition to their pay. The company car is one of the most common cases.

The fringe benefit applies when the car is used for mixed use: that is, both for work reasons and for the employee's private life (weekends, holidays, personal travel). If instead the car is for exclusive use for work and the employee never uses it for themselves, the benefit does not arise.

In short:

• Mixed use → the notional value of the benefit is added to the employee's pay as income in kind and is subject to tax and contributions; if the employee pays a contribution for use of the car, the taxable benefit is reduced accordingly.
• Exclusive use → no benefit, but the car must be tracked and not available outside working hours.

Company car fringe benefit in long-term rental: how it works

In the long-term rental the company does not buy the vehicle: it pays a monthly fee that includes all the main services (insurance, maintenance, assistance, road tax). This model is particularly convenient for managing the fringe benefit because:

• the cost for the company is known and constant, and managing the fleet and documents is simpler;
• there are no hidden costs linked to depreciation, resale or extraordinary repairs;
• the fleet is always up to date and compliant with regulations.

The value of the fringe benefit is not derived from the monthly fee: it is determined using the criteria set by current legislation, which refer to the ACI tables of cost per kilometre for the model and a notional mileage. We recommend checking with your accountant the correct application to your specific case.

How the fringe benefit is calculated in rental

The calculation of the fringe benefit for a company car, including in rental, is based on parameters set by law: you start from the cost per kilometre of the model shown in the ACI tables, referring to a notional mileage, and apply a percentage set by current legislation.

The factors that affect the value are:

• the type of fuel of the vehicle (petrol, diesel, electric, hybrid);
• the CO₂ emissions;
• the cost per kilometre of the model according to the ACI tables;
• any amounts paid by the employee for use of the car, which reduce the taxable benefit.

Since the rules change over time and may be updated, it is essential to consult a tax adviser to obtain an accurate calculation. There are no universal formulas valid for all cases.

Why choose long-term rental for the company car

Long-term rental is an increasingly common choice among companies that want to offer a car to employees without managing the fleet directly. The main advantages:

• Monthly fee with services included: usually insurance, routine and extraordinary maintenance, roadside assistance and road tax; tyres and other services can be added.
• No resale risk: at the end of the contract the car is returned, without having to manage the sale of the used vehicle.
• Cost predictability: the budget is defined from the start, with no surprises.
• Technological updating: you always drive a recent car, with modern safety equipment.
• Simplified administration: a single monthly invoice for all the cars.

If you want to understand how to structure your company fleet, you can discover the car rental solutions for companies offered by RentalZone.

Fringe benefit and rental: what changes for the company and for the employee

When a rental car is given for mixed use, both the company and the employee have specific obligations.

For the company:

• it must inform the employee of the value of the benefit;
• it must pay social security contributions on the benefit portion;
• it must correctly manage the accounting and tax documentation.

For the employee:

• the value of the fringe benefit is taxed as income in kind;
• the amount is deducted from the payslip;
• the benefit contributes to total income.

It is important to stress that the tax and contribution rules may vary. For this reason, before taking out a rental contract with mixed use, it is always advisable to consult your accountant.

Electric and hybrid cars: advantages in long-term rental

Electric and plug-in hybrid cars are becoming increasingly common in long-term rental, also thanks to often more favourable tax treatment than traditional vehicles. Under current legislation, cars with low CO₂ emissions can benefit from relief in the calculation of the fringe benefit.

Choosing an electric or hybrid car in rental is worthwhile because:

• the monthly fee can benefit from dedicated terms;
• running costs (fuel or charging) are generally lower;
• the environmental impact is reduced;
• the company image benefits.

To help you choose between the available models, you can consult the long-term rental offers and find the one best suited to your needs.

How to set up a long-term rental with mixed use

The process for setting up a long-term rental contract with mixed use is simple:

1. Define your needs: how many cars you need, for which roles, with which equipment.
2. Choose the vehicle: assess fuel type, size and optional extras based on usage.
3. Request a quote: you can configure your car and get a tailored proposal.
4. Check the tax aspects: speak to your accountant about calculating the fringe benefit.
5. Sign the contract: after signing, the car is delivered and the monthly fee starts.

If you prefer personalised support, you can find the right vehicle in 6 questions o contact the consultants directly for dedicated advice.

Frequently asked questions

What is the difference between mixed use and exclusive use?

With mixed use, the employee can also use the car for personal purposes and the fringe benefit applies. With exclusive use, the car is intended for work only and the benefit does not apply, but usage must be tracked and limited to working hours.

Is the fringe benefit calculated on the rental monthly fee?

No. The rental monthly fee is not included in the calculation: the value of the benefit is determined using the criteria set out in current legislation, based on the ACI tables of cost per kilometre and a conventional mileage, with percentages that depend on the vehicle's characteristics. It is always advisable to check with your accountant.

Do electric cars have more favourable tax treatment?

Often yes: under current legislation, cars with low CO₂ emissions may benefit from relief in the calculation of the fringe benefit. We recommend checking the updated rules with your tax adviser.

Can I rent a car long-term and use it as a company car?

Absolutely yes. Long-term rental is one of the most widely used solutions by companies to provide cars for employees, with an all-inclusive monthly fee and simplified management.

Conclusion

The company car fringe benefit in long-term rental is a useful tool for offering a tangible benefit to employees, while keeping costs under control and management simple. Remember that tax and contribution aspects must always be checked with your accountant, because the rules can change.

If you are considering introducing or renewing a company car for mixed use, RentalZone can help you find the most suitable solution. Request a personalised quote and discover how simple it is to manage your fleet with long-term rental.