Small Benefit Exemption Gift

Small Benefit Exemption Gifts

While previously the Small Benefit Exemption allowed employers to provide a one off gift with a value not exceeding €500 recent amendments mean employers can now provide employees a maximum value of €1,000 in any tax year.  Employers can give up to two vouchers or gifts to their employees each tax year. This exemption can be utilised for the 2023 tax year.

As is the case with many public holidays. Christmas is a popular time for giving bonuses. So as the “season of giving approaches” it is worth ensuring you are up to date on the rules governing this area, most notably the small benefit exemption.

The small benefit exemption cannot be paid in the form of cash or cheques, it must be in a non-cash form, such as a voucher or a hamper.

Where an employer provides an employee with a small benefit the value cannot exceed €1000. PAYE, PRSI and USC does not apply to this benefit. However if the benefits exceeds €1000 in value then the full value is subject to these taxes. Also, this exemption cannot be applied to more than two gifts. For example, if you were to gift two €300 vouchers early in the year and gift and a further €400 later in the year the exemption could only be applied to the first two vouchers.

Employers can save on these small benefit exemption gifts as they do not have to pay Employers PRSI on the benefit. You can also receive a deduction for the small benefit expense e.g. the cost of gift voucher, for corporate tax purposes.

So why not treat your employees this Christmas to our Paycheck Plus Rewards Cards. They are the ideal gift. They are a simple, quick and cost effective way of rewarding employees while saving tax and allowing your staff to spend their bonuses wherever they choose.

For more on Small Benefits Exemption Gifts read:

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