As the summer holiday approaches, many employees are planning to drive south or take a holiday in Denmark. If an employee has a company car available for private use, the company car can often be used for the holiday without any additional taxation.
However, this requires that the car has already been made available for private use and that it is taxed correctly as a company car benefit. As an employer, it is therefore important to understand the rules on taxation, running costs and employee contributions before the employee sets off.
Yes. If the employee has a company car available for private use, the car may generally be used privately. This also applies to holiday driving in Denmark and abroad.
A company car benefit means that the employee is taxed on having the car at their disposal, not on how many kilometres the car is actually used privately. Once the employee pays tax on the company car benefit, the car can therefore be used privately as much as the employee wishes. The employee’s household may also use the car.
This means that taking a holiday in the company car will normally not trigger additional taxation, provided that the car is already correctly included in payroll reporting as a company car benefit.
Taxation of a company car benefit is calculated according to fixed rules. The employer must determine the value of the car, calculate the taxable value according to the rates for the year, add the environmental surcharge and report the value each month together with the employee’s salary.
It is therefore not decisive whether the employee uses the car a little or a lot privately. A long holiday trip does not generally change the tax treatment, as long as the car is already taxed as a company car benefit.
As an employer, you should nevertheless ensure that the company car scheme and the company’s internal guidelines clearly describe how the car may be used on holiday and which expenses the company covers.
The employer may pay ordinary running costs for the company car without this having further tax consequences for the employee. This applies to expenses that are operationally connected with the use of the car.
These may include, for example:
If the company covers fuel during the holiday, this will therefore generally form part of the company car benefit, provided the expense is an ordinary running cost for the car.
If the employee pays an amount to the employer for private use of the car, the amount must be paid from the employee’s net salary. The employer can then deduct the amount from the taxable value of the company car benefit before reporting the value.
It is important to distinguish between payment to the employer and payment directly to a third party.
If the employee pays for petrol directly to the filling station or oil company, this does not give the employee any tax deduction or reduction.
The company should therefore have clear guidelines on how holiday expenses relating to the company car are handled and how any employee contribution must be documented. We can help you with this.
Not all expenses connected with a holiday trip are ordinary running costs for the car.
Expenses such as parking, bridge tolls, ferries, motorway tolls and fines should be assessed separately. If the employer pays private expenses that are not covered by the rules on company car benefits, this may trigger taxation as an employee benefit.
Fines, such as speeding fines and parking fines, should generally not be regarded as a running cost of the car. If the employer pays a private fine on behalf of the employee, this will normally be taxable for the employee.
When an employee has a company car available for private use, the employer must report the value each month together with the salary. SKAT states that the value should only be reported in the months in which the employee has access to the car and can use it privately.
It is also important to calculate the value using the correct rates for the relevant year. In 2026, for example, SKAT shows calculations in which the value of the car is taxed at 22.5%, and the environmental surcharge is calculated as the periodic tax multiplied by 700%.
For your employees to report the correct information in their preliminary income assessment when they use a company car on holiday, it is important to understand the rules for valuing the car. You can find more information at SKAT.dk.
The rules on company car benefits can be difficult to handle in practice, especially when the company car is used privately, on holiday or abroad.
At Azets, we advise on payroll, tax and employee benefits, including the correct handling of company car benefits, employee contributions and reporting. We can help you review your company car schemes so they are clear for employees and handled correctly in payroll administration.
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