Tax threshold rise on non-cash bonuses to be fast tracked

Q: I am an electrician with three employees. I want to give them a tax free cash Christmas bonus this year, can I do this and if so how much can I give?

25th November 2015

A: Ordinarily, any cash payment made by yourself to your employees is subject to payroll taxes but you can avail of what is called the small benefit exemption. This is where an employer provides an employee with a small benefit.You can only make one such benefit to a each employee in a tax year and the benefit usually takes the form of a gift voucher.

 

The limit used to be €250 however Budget 2016 announced this will increase to €500. Although this change was not supposed to take effect until 2016,  the Minister for Finance has said the move will now be fast tracked so that employers may give a qualifying voucher before this Christmas.

 

If you are looking for other means of tax effecient remuneration for staff, you may also be intertested in purchasing a bike for your employee via the Bike to work scheme, or a qualifying travel pass such as a yearly rail ticket. Each of these options will not attract payroll taxes.

Disclaimer: Advice shared in this blog is intended to inform rather than advise. 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 forum, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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