Small Benefit Exemption – Gifts
Employers can provide employees with a small benefit exemption to a maximum value of €500 once in any tax year.
With Christmas approaching, and usually a popular time for giving bonuses, it’s worth ensuring you are up to date on the rules governing this area.
The small benefit exemption cannot be paid in the form of cash or cheques etc.. 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 €500. PAYE, PRSI and USC does not applied to this benefit. However if the benefits exceeds €500 in value then the full value is subject to these taxes. This exemption cannot be apply on the cumulative value of a number of gifts. For example, you can’t give a voucher of €300 earlier in the year and give a further €200 later in the year. It is to be applied as a single gift only once in a tax year.
Employers can save on these 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 corporation tax purposes.
So treat your employees this Christmas tax free. Our ‘PaycheckPlus Perfect Card” is the ideal gift as the user has the freedom to spend their voucher anywhere they like. Other cards on the market you are limited to certain stores, but our card is a prepaid Mastercard so can be spent anywhere MasterCard is accepted.
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Managing payroll is a complex and time-consuming operation. Keeping up to date with ever evolving legislative changes, ensuring payroll compliance and delivering employee wages accurately and on time takes its toll on a business’ senior resources. Here at Paycheck Plus, we’ve been providing comprehensive payroll services tailored specifically to each of our client’s needs for over a decade. Our payroll specialists handle all aspects of payroll management for our clients including answering our client’s employee queries through our Employee Assist Helpline.
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