Medical insurance benefit tax calculator, 2026/27
Company-paid private medical insurance is a popular perk but a fully taxable benefit in kind. Enter the annual premium your company pays to see the personal tax cost to you and the National Insurance cost to the company.
The medical insurance benefit tax calculator runs on the rates and thresholds HMRC has published for the 2026/27 tax year, so the figures you see reflect the position your company is actually filing on rather than a historic set of bands. Change any input and the result recalculates immediately, with no sign-up and nothing sent anywhere.
If you are a director of a UK limited company, use it as a first look before a decision rather than as the decision itself. The taxable benefit equals the exact cost the company pays for the insurance, reported on a P11D or payrolled through PAYE. Real company positions bring in other income, reliefs, group structures and prior year adjustments that a single page of inputs cannot see, which is why the workings are written out below under employee benefits & company cars. Read those, then check the numbers against your own accounts, and speak to us if anything looks materially different from what you expected.
Last reviewed 12 September 2026 for the 2026/27 tax year. Reviewed by Waqas Sagar, Member of ICAEW, Fellow of ACCA, Fellow of AAT.
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Result, 2026/27
Taxable benefit (the premium itself)
Your annual income tax on the benefit
40.0% marginal rateEmployer Class 1A NIC (15%)
Total cost of the perk to you and the company
Illustration only, figures are based on the rates you have selected and the information entered. Please check your own position with us before acting.
Estimates for the 2026/27 tax year using published GOV.UK rates. Switch between 2026/27 and 2025/26 above.
How this is calculated
Private medical insurance paid for by an employer is one of the more straightforward benefits in kind to value: the taxable amount is simply the cost the company actually incurs for the policy, not some notional or reduced figure.
That cost is added to your other income and taxed at your marginal rate, either through a P11D and self assessment adjustment or, increasingly, through payrolling of benefits where the employer spreads the tax through your payslip during the year.
The company separately pays Class 1A National Insurance at 15% on the same premium figure, which is a real cost to the business and should be budgeted for alongside the premium itself.
Is company-paid medical insurance still worth it?
Because the whole premium is taxable, a higher-rate taxpayer effectively pays 40% of the premium in extra tax, on top of the employer's 15% NIC. For a director who could otherwise pay the premium personally from taxed income, the comparison is close, and the answer often depends on whether the company can obtain materially cheaper group rates than an individual can.
Some directors instead take a slightly higher salary or dividend and buy insurance privately, avoiding the employer NIC leg, though group schemes can still be cheaper overall.
Related benefits taxed differently
Health screening (one basic check a year) and certain workplace eye tests and vaccinations can be provided tax-free, unlike ongoing private medical cover.
Employer-funded health cash plans and dental insurance are usually taxed in the same way as medical insurance, as the exact cost of provision.
What this means for your company
Treat the result as a planning figure for the 2026/27 tax year. If it changes what you were about to do, take a director's salary, a dividend, a large asset purchase or a filing decision, check it against your own accounts first. We can review the position with you and confirm the tax treatment before you commit.
Frequently asked questions
Do I need to report medical insurance on a P11D?
Yes, unless your employer has registered to payroll benefits in kind, in which case the tax is collected through your payslip during the year instead of via a P11D and separate tax bill afterwards.
Is medical insurance ever tax-free?
Only in narrow cases, such as insurance covering treatment needed solely because of duties performed abroad, or where it forms part of an excepted group life or injury benefit; general private medical cover is almost always taxable.
Does the company get corporation tax relief on the premium?
Yes, the premium is a normal deductible business expense for corporation tax purposes, provided it is paid wholly and exclusively for the business, which employee benefits generally satisfy.
Is it cheaper to give a cash allowance instead of insurance?
Rarely, because a cash allowance is subject to income tax and employee and employer National Insurance, whereas the insurance benefit only attracts income tax and employer Class 1A NIC, with no employee NIC charge.
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