Small Benefit Exemption


Small Benefit Exemption

Previously the Small Benefit Exemption allowed employers to provide a one off gift with a value not exceeding €500 recent changes 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 2022 tax year.

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 exceed €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 €250 vouchers early in the year and gift and a further €500 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.

The above can be a very smart way to treat your employees at year end.

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