Maximise Your Small Benefit Exemption Before Year-End
As the festive season approaches, employers have an opportunity to reward staff tax-efficiently using the Small Benefit Exemption. Here’s what you need to know to make the most of this allowance before 31 December 2025.
What Is the Small Benefit Exemption?
Employers can provide up to five non-cash benefits per employee per year, with a combined value of €1,500, completely free from PAYE, USC, and PRSI. This exemption applies only to benefits that cannot be exchanged for cash, such as gift vouchers or store cards.
Key Conditions
- Only the first five benefits qualify for the exemption.
- The total value of all qualifying benefits must not exceed €1,500.
- Benefits must be non-cash and provided by 31 December 2025.
Steps to Claim Before Year-End
- Review Benefits Provided So Far
Check how many benefits each employee has received and their total value. - Plan Additional Gifts Carefully
Ensure any extra benefits do not exceed the €1,500 annual limit or the five-benefit cap. - Record and Report Correctly
Log the date and value of each benefit in your payroll system. Enhanced Reporting Requirements (ERR) mean these details must be included in real-time payroll submissions.
Why Act Now?
Unused allowances cannot be carried forward. Providing benefits before year-end ensures employees enjoy Tax-free rewards and employers avoid unnecessary payroll adjustments later.
Note: A single gift worth €1,500 is allowed, provided it meets the non-cash criteria.
Need help planning or reporting your year-end benefits? Contact our team for guidance on compliance and payroll integration.