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Company Director Ireland

Questions and Answers

Can company directors avail of the Small Benefit Scheme?

I am the director of a small company and giving my employees a voucher though the Small Benefit Scheme. Can I also avail of this scheme?

If you are a company director wondering whether you can avail of the Small Benefit Scheme (SBS) the key thing to work out is whether, as a 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“.
 
Therefore the following commonly applies:
 

Proprietary Director

A Proprietary Director qualifies for the scheme as long as they are in paid employment in the company. As proprietary directors are classified as self-employed for PRSI, and there is no employer PRSI for self-employed workers, the overall tax-saving may be 11.05% less than for non-proprietary directors.
 
 

Salaried Director

 
A salaried director qualifies for the scheme as they clearly satisfy the employer / employee relationship requirement.
 
 

Director who receives Directors’ Fees

 
A director who receives directors’ fees qualifies for the scheme as long as the directors fees are paid via payroll (which is the method Revenue recommends).
 
 

Non-Exec Director who receives Dividend Income

 
A non-exec director who receives dividend Income are not specifically excluded from the scheme but these directors may not satisfy the employer / employee relationship requirement. Companies should seek their own specific tax-advice on this.
 
 

Unpaid Directors

 
Unpaid directors normally do not qualify for the scheme as they are not employed by the company. In some cases, employed directors can forego salary while still being considered employed. Companies should seek their own specific tax-advice on this.

Frequently Asked Questions

Under the Small Benefit Scheme businesses can give employees up to €1000 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. It is not immediately apparent as to whether this new amount of €1,500 will come into effect before the end of 2024. More to follow.

No, this benefit must be in the form of a voucher which can only be redeemed in exchange for goods and services.

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.

No, because sole traders do not receive Schedule E income from their businesses. Employees of sole traders can avail of the scheme, however.

Date published 2 Oct 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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