As an employer, the\u00a0Scheme<\/a>\u00a0<\/strong>allows you to give certain types of rewards to your employees that are NOT subject to any Benefit-In-Kind (BIK) tax for the employee, or employer tax (Employer PRSI) for the company.<\/p>\n\n\n\n From working with hundreds of Irish companies over the past 10 years to provide tax-free rewards under the Small Benefit Scheme, here are the most common questions we get asked.<\/p>\n\n\n\n A:<\/strong>\u00a0Yes, up to the \u20ac500 threshold as long as the bonus is not guaranteed and seen as part of the employee\u2019s normal salary. Many employers use the scheme to pay the first \u20ac500 of any yearly bonus tax-free.<\/p>\n\n\n\n A:<\/strong>\u00a0Only the 1st reward will qualify for the Small Benefit Scheme. For example, you award a \u20ac250 voucher in January to an employee, and then another \u20ac250 to the same employee in July. The 1st voucher is tax-free, however full BIK and employer PRSI must be paid on the 2nd voucher.<\/p>\n\n\n\n The employer could pay the BIK on this by grossing up the \u20ac250 benefit in the employee\u2019s payslip in July, and paying the taxes for them.<\/p>\n\n\n\n A:<\/strong>\u00a0The entire reward is subject to BIK. For example, you award an employee a gift voucher worth \u20ac575 in December. It is the first award\/gift the employee has received that year. Because the benefit exceeds \u20ac500 in value, the full value of that benefit is subject to PAYE, PRSI and the USC.<\/p>\n\n\n\n In this case, the best solution would be to award \u20ac500 in tax-free gift vouchers to the employee and process an additional bonus payment of \u20ac75 in the employee\u2019s payroll in December. The company can decide whether the employee should pay the tax on the \u20ac75 or whether to gross-up the payment and pay the tax on it for the employee.<\/p>\n\n\n\n A:<\/strong>\u00a0Yes! You can extend the scheme throughout the year in conjunction with a qualifying points system, such as AllGo Points. With this Revenue-approved tool, you can award points to your employees throughout the year, and then have the points converted into gift cards at the end of the year up to max of \u20ac500.<\/p>\n\n\n\n A:<\/strong>\u00a0Yes, as long as they are paying income tax, PRSI and USC. As proprietary directors are classified as self-employed, and there is no employer PRSI for self-employed workers, the overall tax-saving may be 10.95% less than for non-proprietary company directors.<\/p>\n\n\n\n A:<\/strong>\u00a0Yes, they do. No distinction is made by Revenue between full and part-time employees. As long as the person is an employee of the company, they can avail of the full \u20ac500 threshold regardless of the number of hours they work.<\/p>\n\n\n\n A:<\/strong>\u00a0Yes. How they qualify just depends on how they get paid. If an external contractor is paid through your company\u2019s payroll, then they can avail of the Scheme through you. If they or their company invoice for their services, they can avail of the scheme by awarding themselves as a self-employed worker or through their own company. They cannot qualify both ways!<\/p>\n\n\n\n A:<\/strong>\u00a0Yes, as long as they are paying income tax, PRSI and USC. As there is no employer PRSI for self-employed workers, the overall tax-saving may be 10.95% less than for employed workers.<\/p>\n\n\n\n A:<\/strong>\u00a0No. On January 1st each year, the \u20ac500 is reset for every employee, regardless of how much or how little they were awarded through the scheme in the previous year.<\/p>\n\n\n\n A:\u00a0<\/strong>No. If audited, it is sufficient to show that the total cost of the Small Benefit Scheme is the same\u00a0or less\u00a0than the no. of employees at the time multiplied by \u20ac500. More detailed records can obviously be kept if desired.<\/p>\n\n\n\n <\/p>\n","protected":false},"excerpt":{"rendered":" The Small Benefit Scheme (SBS) is a statutory tax relief scheme offered by Irish Revenue that allows employers to provide a tax exempt benefit to Irish employees of up to \u20ac500 per year. As an employer, the\u00a0Scheme\u00a0allows you to give certain types of rewards to your employees that are NOT subject to any Benefit-In-Kind (BIK) […]<\/p>\n","protected":false},"author":4,"featured_media":9013,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[86],"tags":[101,104,97,126,114,100,129,117,105,98,130,106,102,87,125,99,91,128,127,93],"class_list":["post-9012","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-small-benefit-scheme","tag-e500-an-post","tag-e500-small-benefit-scheme","tag-e500-voucher","tag-e500-vouucher","tag-bonus","tag-company-bonuses","tag-employee-motivation","tag-employee-performance","tag-employee-reward-programme","tag-employee-rewards","tag-performance-incentive","tag-small-benefit","tag-small-benefit-exemption-scheme","tag-small-benefit-scheme","tag-staff-rewards","tag-staff-rewardstax-free-rewards","tag-tax-free-vouchers-for-employees-ireland","tag-tax-savings-ireland","tag-tax-free-employee-rewards","tag-tax-free-rewards"],"acf":[],"_links":{"self":[{"href":"https:\/\/allgogiftcard.com\/wp-json\/wp\/v2\/posts\/9012","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/allgogiftcard.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/allgogiftcard.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/allgogiftcard.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/allgogiftcard.com\/wp-json\/wp\/v2\/comments?post=9012"}],"version-history":[{"count":3,"href":"https:\/\/allgogiftcard.com\/wp-json\/wp\/v2\/posts\/9012\/revisions"}],"predecessor-version":[{"id":11157,"href":"https:\/\/allgogiftcard.com\/wp-json\/wp\/v2\/posts\/9012\/revisions\/11157"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/allgogiftcard.com\/wp-json\/wp\/v2\/media\/9013"}],"wp:attachment":[{"href":"https:\/\/allgogiftcard.com\/wp-json\/wp\/v2\/media?parent=9012"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/allgogiftcard.com\/wp-json\/wp\/v2\/categories?post=9012"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/allgogiftcard.com\/wp-json\/wp\/v2\/tags?post=9012"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Q1: Can we use the Small Benefit Scheme to pay bonuses?<\/h2>\n\n\n\n
<\/a><\/strong>Q2: What happens if I want to give employee rewards twice a year?<\/h2>\n\n\n\n
Q3: What happens if I want to give an employee a single reward that is over \u20ac500?<\/h2>\n\n\n\n
Q4: Is there any way to use the Small\u00a0Benefit Scheme year round?<\/h2>\n\n\n\n
Q5: Can company directors and proprietary directors avail of the Small Benefit Scheme?<\/h2>\n\n\n\n
Q6: Do part-time employees qualify for the full \u20ac500 relief on the Small Benefit Scheme?<\/h2>\n\n\n\n
Q7: Do contractors qualify for the\u00a0Small Benefit Scheme?<\/h2>\n\n\n\n
Q8: Can self-employed \/ sole traders workers avail of the Small Benefit Scheme?<\/h2>\n\n\n\n
Q9: If not fully used up, can the \u20ac500\u00a0tax-free amount be carried over to next year?<\/h2>\n\n\n\n
Q10: As an employer, do I need to make a return to Revenue for the Small Benefit Scheme?<\/h2>\n\n\n\n
Can’t find the answer to your question here? Please contact us<\/a>\u00a0and we will be happy to help any questions you have regarding the Small Benefit Scheme<\/a>.<\/p>\n\n\n\n