Specialist
As the Coronavirus pandemic continues we have seen a rise in employers wanting to reward the exceptional efforts of their employees during the crisis.
If your organisation is looking for ways to show your appreciation for your employee’s hard work during the crisis, then you too could benefit from recent concessions to the Small Benefit Exemption Scheme.
What are Small Benefits?
Most employees welcome cash bonuses, but unfortunately, when taxes such as PAYE, USC and PRSI are deducted, the take-home figure is often significantly reduced.
Consequently, many employers have turned towards non-cash alternatives to reward their employees. Chief among these are “small benefits”.
Small benefits afford employers the opportunity to gift employees a voucher of up to €500 in value, tax free, each year. This benefit is exempt from PAYE, USC and PRSI and so makes for an ideal alternative to costlier cash bonuses.
Under section 112B of the Taxes Consolidation Act 1997, organisations are restricted to issuing only one voucher per year to any given employee. However, in the wake of the Coronavirus Pandemic the conditions relating to the provision of vouchers as part of the small benefit exemption scheme have been relaxed, giving businesses the opportunity to reward employees who continue to work during the restricted period.
The result of this is that employers who want to recognise the efforts of key and/or frontline workers during the COVID-19 crisis can now issue an additional award. However, please note that the cumulative value of the benefits must not exceed €500 and, as always, employers must retain appropriate documentation where the concession is availed of. Also note that this concession only applies to employees who continue to work during the restricted period.
By Morgan Campbell of Paycheck Plus.