Tax Free Vouchers For Staff – Small Benefit Scheme
Small Benefit Exemption in Ireland: A Win-Win for Small Employers and Staff
As a small business owner in Ireland, finding ways to reward your team without increasing your tax bill can feel like a challenge.
Thankfully, the Small Benefit Exemption offers a simple, cost-effective solution that benefits both employers and employees.
What Is the Small Benefit Exemption Scheme?
From 1 January 2025, Irish employers can give up to five non-cash benefits per year, with a combined value of €1,500, completely tax-free. These benefits must:
- Not be cash or convertible to cash.
- Be used to purchase goods or services (e.g., gift cards, vouchers).
- Be reported under Enhanced Reporting Requirements.
If you give more than five benefits within a year, only the first five qualify. A single benefit of up to €1,500 is allowed, but if it exceeds that amount, the full value becomes taxable.
Why Is This Good News for Small Employers?
- Tax Savings
Unlike cash bonuses, which attract PAYE, USC, and PRSI, small benefits are completely exempt. For example, a €1,500 cash bonus could cost an employer over €3,400 after taxes, while a €1,500 voucher costs exactly €1,500. - Boost Employee Morale
Regular recognition improves engagement and retention. With the new rules allowing up to five gifts annually, you can reward staff for milestones, seasonal events, or achievements without extra tax costs. Reward employees without incurring any additional tax bills for your business! - Flexible and Simple
Popular options include gifts vouchers, retailer gift cards, or prepaid cards. These perks feel personal and meaningful, making them a great alternative to taxed bonuses. For example, I’d imagine a gift card for a travel agent/airline as a contribution to next year’s holiday would be very welcome to most employees! Or how about a voucher towards a gym membership or favourite past-time?
Benefits for Employees
- Full Value Received: Employees enjoy the entire €1,500 benefit without deductions.
- Increased Purchasing Power: Vouchers can be used for everyday expenses or treats, making them highly appreciated.
Compliance Matters
To stay compliant:
- Keep accurate records of voucher purchases.
- Report the date and value under Enhanced Reporting Requirements.
- Ensure benefits meet Revenue conditions (non-cash, not redeemable for cash).
How Adept Accounting Services Can Help
As a small employer, you don’t want to get caught out by Revenue rules. That’s where we come in:
✅ Set up a compliant reward system
✅ Track and record benefits accurately in your accounts
✅ Ensure timely reporting to Revenue
✅ Advise on cost-effective ways to integrate the exemption into your payroll strategy
We make it simple, so you can focus on running your business while keeping your team happy.
Ready to Reward Your Staff Tax-Free?
Contact us today to implement the Small Benefit Exemption correctly and start saving on tax while boosting employee morale.
For additional information on the scheme, check out these links:
