Tax Free Benefit!

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Where an employer provides an employee with a small benefit (i.e. a benefit with a value not exceeding €250) PAYE/PRSI/LEVIES need not be applied to that benefit.  The following conditions apply:

• The benefit must not be paid in cash.  For example, a store/shopping centre voucher or a Christmas hamper for your employees at Christmas time.
• Only one such benefit per tax year.
• If the benefit exceeds €250 in value the full value of the benefit is taxable.
• If the benefit value is less than €250 that is ok, but any subsequent vouchers will be disregarded.  For example if an employer gives an employee a voucher for €100 and then later in the tax year a second voucher for €100 only the first voucher will be tax free.

The average tax saving for a higher rate tax payer is €240 per annum and employers save PRSI too.   

Consider this before 31st December 2011.

Imelda Prendergast is Partner in OSK. Contact OSK Tax Advisor Dublin for all your tax and accounting services today.

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