It’s my friend Eddie’s birthday tomorrow. This reminded me that Revenue gives employers the ability to give their employees a valuable tax-free gift once a year.
Did you know that directors and employees can receive a non-cash bonus of up to €500 once a year? This is usually done through vouchers. It’s a great way to give yourself and your staff a tax-efficient bonus.
If you follow the rules, neither your company nor your employees will pay PAYE, PRSI or USC. The potential saving is up to €653 in tax per employee. This is one not to miss, but you need to get it done before the 31st of December.
The key rules are
- It has to be in a non-cash format and the voucher cannot be convertible to cash
- The voucher must be purchased by the business (i.e. not by the director or employee and then reimbursed)
- You can only do it once a year, so use up all the €500 in one go
- Salary sacrifice is not allowed, i.e. you cannot reduce salary by an equivalent amount to fund the voucher
What’s stopping you?