23/11/2015

- Reward Employees without having to Incur Additional Tax

Increase to €500 in the Small Benefits Exemption 2015

 

UPDATE: Finance Bill 2015 introduced the Small Benefits Exemption which allows certain non-cash benefits to be provided tax-free to employees. Revenue has now confirmed that the exemption also applies to all company Directors.

Christmas Bonus for Staff
Small Benefit Exemption

As Christmas approaches, you may consider rewarding your staff in some way for their work during the past year. Where an employer provides an employee with a small benefit, (that is a benefit with a value not exceeding €500); PAYE, PRSI and USC need not be applied to that benefit. Only one such benefit given to an employee in an income tax year qualifies for such treatment. Where a benefit exceeds €500 in value, the full value of the benefit is liable to PAYE, PRSI and USC.

It is important to note that monetary benefits e.g. cash, cheques, credit transfer etc., do not qualify under the small benefit exemption. However, a voucher up to the value of €500 does qualify. The small benefit exemption does not apply to the cumulative value of a number of benefits. It applies to a single benefit only.


The small benefit exemption does not apply to the cumulative value of a number of benefits but rather it applies to a single benefit. Employees who avail of the small benefit exemption cannot avail of the staff discounts concession in the same tax year.

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