A Christmas bonus can put a smile on every employee’s face and can be the perfect way to say “thank you” for the hard work done during a challenging year!

The small benefit exemption means that employers can give employees some vouchers or other non-cash benefits each year without paying tax on them.

As announced on Budget Day, from 1 January 2022, you can give up to 2 benefits each year, up to a total value of €1,000. If more benefits are given in a year, only the first 2 benefits qualify.

Qualifying Criteria

The voucher or tangible non-cash benefit must meet all of the following conditions in order to be a qualifying incentive: 

• the voucher or benefit cannot be part of any salary sacrifice arrangement between the employee and employer, 
• the voucher or benefit can only be used to purchase goods or services and cannot be exchanged in part or in full for cash, 
• the voucher or benefit cannot exceed €500 in value, and 
• only one voucher or benefit may be given in any one tax year. 

Who is Eligible?

You can give this benefit to any employee of the company including directors and shareholders as long as they are on the payroll.  Part-time employees qualify also.  

Benefits for Employees: 

Employee is not liable for PAYE, PRSI and USC on value of award

Benefit for Employers: 

Employers are not liable for employer PRSI (10.75%) on value of award Single Non-Cash Awards

There is no obligation to give a benefit to employees, you may choose to give only to a select group, and you may give different amounts to different employees.  It’s entirely up to you.