Introduction
As a business owner, you may want to reward your hardworking employees for their efforts throughout the year. However, providing benefits or gifts can be costly and subject to tax implications. That's where the Small Benefit Exemption scheme comes in.
Qualifying Incentive
From 1st January 2022, employers can give their employees up to two small benefits tax-free each year, as long as the combined value of the two benefits does not exceed €1,000. These benefits must not be in cash and can only be used to purchase goods or services. If more than two benefits are given in a year, only the first two may qualify for tax-free status. Unused allowance amounts cannot be carried over.
It's important to note that a single benefit of up to €1,000 may be provided to an employee tax-free. If a single benefit exceeds €1,000 in value, the full value of that benefit is subject to tax.
The following are some frequently asked questions about the Small Benefit Exemption Scheme in Ireland. If you have any further questions, our experienced professionals can provide guidance on this and other tax-related matters to help you navigate complex tax laws and regulations. Contact us today to schedule an appointment.