In the last few decades, ionic liquids (ILs) have gained significant attention as lubricants and lubricant additives due to their polar nature, low vapour pressure and tunable physicochemical properties. In this work, quantum chemistry calculations and atomistic Molecular Dynamics (MD) simulations were employed to predict thermal degradation mechanisms of a potential lubricating agent - the tributyloctylphosphonium bis(oxalato)borate ([P4,4,4,8][BOB]) IL. It was found that the onset of decomposition of the studied IL coincides with a cleavage of the B-O bonds in the [BOB](-) anion. Consequently, a series of chemical reactions of the [P4,4,4,8](+) cation with the [BOB](-) anion was triggered yielding alkylboranes, alkenes, trialkylphosphines, CO and CO2. Another ionic system, consisting of [P4,4,4,8][Cl], was also tested for a comparison. Thermogravimetric measurements have shown a higher thermal stability of [P4,4,4,8][BOB] compared to that of [P4,4,4,8][Cl] at least at the initial stage of decomposition, in accord with the presented calculations. Quantum chemical frequency calculations also agreed with the experimental Fourier Transform Infrared (FTIR) spectroscopy results.