Irish Revenue’s Small Benefit Exemption Scheme
Up to 31 December 2019 employers could give an employee one tax free benefit each year with a limit of €500. Then on 27th September 2022 it was announced there was changes in the Budget allowing employers to provide employees with more benefits.
Rules
- From 1 January 2022 employers can provide employees with up to 2 small benefits, tax free.
- The combined value of these two gifts cannot exceed €1000.
- If there are more than 2 gifts given in one year, then only the first two qualify for tax free status.
- Allowance cannot be carried over.
- However, these benefits must not be cash or a voucher that can be redeemed as cash.
- Can’t be part of a salary sacrifice.
Examples
These benefits are a good opportunity to let employers make their staff feel appreciated and recognised. Although these benefits don’t allow you to give them cash or a tax-free bonus it does allow you to buy them something they may enjoy catered to their personal preferences.
These can include:
- Gift Cards
- Vouchers
- Tangible gifts
- Spa treatments
How much can you save?
According to One4All the gift voucher company if you were to add €1000 euro as a bonus onto an employee’s salary who’s on a higher tax band, it could cost your business €2313.54.
Overall, it saves you thousands to make use of this benefit and your employees will still feel appreciated and valued.
Written by Sorcha Jones, apprentice accounts technician