Small Benefit Exemptions

Small Benefit Exemption Scheme

What are Small Benefits?

Most employees welcome cash bonuses, but unfortunately, when taxes such as PAYE, USC and PRSI are deducted, the take-home figure is often significantly reduced. Consequently, many employers have turned towards non-cash alternatives to reward their employees. Chief among these are “small benefits”.

Small benefits afford employers the opportunity to gift employees a voucher of up to €500 in value, tax free, each year. This benefit is exempt from PAYE, USC and PRSI and so makes for an ideal alternative to costlier cash bonuses.

Under section 112B of the Taxes Consolidation Act 1997, organisations are restricted to issuing only one voucher per year to any given employee. However, in the wake of the Coronavirus Pandemic the conditions relating to the provision of vouchers as part of the small benefit exemption scheme have been relaxed, giving businesses the opportunity to reward employees who continue to work during the restricted period.

The result of this is that employers who want to recognise the efforts of key and/or front-line workers during the COVID-19 crisis can now issue an additional award. However, please note that the cumulative value of the benefits must not exceed €500 and, as always, employers must retain appropriate documentation where the concession is availed of. Also note that this concession only applies to employees who continued to work during the restricted period.

How can my employees avail of Small Benefit Concessions?

If you are looking to reward your employees with a well-earned bonus Paycheck Plus offer a prepaid Mastercard® which can be spent in any location where MasterCard is accepted. Unlike other cards which are limited to certain stores, it can be used in more than 53 million locations worldwide, including on-line. This PAYE, USC & PRSI free gift card is fully compliant with the Small Benefit Exemption Scheme, has no commission fees and gives your employees the freedom to spend their voucher anywhere they like.

If you would like to treat your employees to a tax  free Christmas bonus contact our resident experts on +353 (0) 1 905 9400 or Register your interest here.

For more related to Small Benefit Exemption Scheme read:

Small Benefits Exemption

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