The Small Benefit Exemption Scheme – Benefit In Kind

The Small Benefit Exemption Scheme was previously a Revenue concession in respect of small gifts/awards provided to employees by employers. The Finance Act 2016 brought this concession into legislation and increased the benefit from €250 to €500.

Under the terms of the Small Benefit Exemption Scheme employers can give employees a small benefit of up to €500 in value each year, free from all taxes, including PAYE, USC and PRSI. Employers are not subject to employer PRSI (10.75%) on the value of the award. Where any award exceeds €500 in value, the full value of the award is subject to PAYE, PRSI and USC.

The benefit must not be paid in cash. If more than one benefit is paid in a given year, only the first one qualifies for tax free status. Unused allowance amounts cannot be carried over. Tax-free vouchers or benefits can be used only to purchase goods or services, and they cannot be redeemed for cash.

The suggested proposal is to increase the limit on the Small Benefit Exemption Scheme from €500 to €2,000, and expand the scheme in the following manner:

  • Allow employers to provide a total of €2,000 of the normal gross pay in tax free payment over the first two months of payroll in 2021.
  • As with the existing scheme, payment can only be made in vouchers that have spending restricted to the Republic of Ireland and which cannot be exchanged for cash.
  • By spreading the scheme over 2 months, this ensures that lower paid workers can avail fully of the scheme.
  • Applying the existing scheme to the program ensures that the scheme can be implemented efficiently and quickly by Government.

Dundalk Chamber would encourage you to give the Shop Local Gift Vouchers for this as they can be spent in over 340 shops and businesses around Dundalk. They have no expiry date and do not lose value over time. Also the shops pay no commission so they get the full amount back. For more information on Shop Local Gift Vouchers call Dundalk Chamber on 042 9336343 or email you can also find information on