Questions and Answers
What's the best way for me to pay a Christmas Bonus?
I run a business with 12 employees and wondering if the Small Benefit Exemption Scheme is the most cost-effective way to pay them a Christmas Bonus?
A great way for small businesses to pay a bonus at Christmas is through the Small Benefit Exemption Scheme.
Under the Small Benefit Exemption businesses can give employees, including directors, up to €1,000 once a year completely tax-free.
How much can I give?
Under the Small Benefit Exemption businesses can give employees up to €1,000 a year completely tax-free, however there is no obligation to give the full amount.
How can I pay it?
This annual bonus is usually provided for in the form of a voucher which can only be redeemed in exchange for goods and services.
Find out more
Read further details on the Small Benefit Exemption here.
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Frequently Asked Questions
The benefit must be detailed under Revenue’s Enhanced Reporting Requirements in real time i.e., on or before the date of payment.
No, because sole traders do not receive Schedule E income from their businesses. Employees of sole traders can avail of the scheme, however.
Yes, as long as they are in receipt of “Schedule E” income from their company on which income tax, PRSI and USC is being deducted.
The key thing to work out is whether as a company director you are considered an employee as the legislation behind the scheme states that the voucher must be “given to an employee by his or her employer. More here
No, this benefit must be in the form of a voucher which can only be redeemed in exchange for goods and services.
Under the Small Benefit Exemption businesses can give employees up to €1,000 a year completely tax-free.
In Budget 2025 it was announced that the amount that can be given tax free under the Small Benefit Scheme will be increased to €1,500. This change is effective from 1 January 2025.
Date published 18 Dec 2019 | Last updated 12 Dec 2024
This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.
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