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