The “Small Benefit Exemption Scheme”, or “Small Benefit Scheme” as it is more commonly known, was announced by the Irish Government in the 2004 Budget and came into existence on 1st January 2004. The scheme allows employers to provide a tax exempt benefit to Irish employees each year.
It was introduced as part of a new Benefit-in-Kind (BIK) tax system introduced that year, which did away with PRSI relief for employers who provided luncheon vouchers to employees.
Section 112B of the Taxes Consolidation Act 1997 is the statutory instrument that underpins the Scheme.
As an employer, the Small Benefit Scheme allows you to give certain types of rewards to your employees that are NOT subject to any Benefit-In-Kind (BIK) tax liability – either for the employee or for the employer.
The original maximum threshold amount for the Scheme was €100 per employee per year, and this was increased to €250 in 2005. In 2015, the threshold was in increased to €500, and in September 2022, the tax-free threshold was increased to €1,000.
Read the full guide from ISME Members Allgo here.
Allgo Small Benefit Guide - 6th Edition
