Questions and Answers
Budget 2025: What are the changes to the Small Benefit Scheme?
I heard something today about the tax free voucher scheme for employees? What do I need to know.
The scheme you are referring to is called the Small Benefit Scheme (SBS). It is a statutory tax relief scheme offered by Revenue that allows employers to provide a tax-exempt benefit to Irish employees. The value of this was up to €1,000 per year, but it was announced in Budget 2025 that this amount 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 the current year.
The scheme allows you to give certain rewards to your employees that are NOT subject to Benefit-In-Kind (BIK) tax for the employee, or employer tax (Employer PRSI) for the company.
The benefit can now be given five times a year (previously it was two times).
Company Directors can often avail of this scheme. Self-employed workers in receipt of Schedule E income from their company, on which income tax, PRSI and USC is being deducted can also avail of the scheme.
Frequently Asked Questions
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.
No, this benefit must be in the form of a voucher which can only be redeemed in exchange for goods and services.
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
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.
The benefit must be detailed under Revenue’s Enhanced Reporting Requirements in real time i.e., on or before the date of payment.
Date published 2 Oct 2024 | Last updated 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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