Small Benefit BIK Exemption

2.3 Small benefits

Where an employer provides an employee with a small
benefit (that is, a benefit with a value not exceeding
€100) PAYE and PRSI need not be applied to that
benefit. No more than one such benefit given to an
employee in a tax year will qualify for such treatment.
Where a benefit exceeds €100 in value the full value of
the benefit is to be subjected to PAYE and PRSI.

Click to expand...

podgerodge said:

I am aware of the Eur250 small benefit BIK exemption currently allowed. My employer states that as the payment to staff each christmas is not a gift but a "bonus" based on a performance review, the exemption does not apply and the 250 is fully taxable.

Any ideas?

Click to expand...

ClubMan said:

Tax/PRSI exemptions for bonus bonds were removed at the start of this year if I'm not mistaken and they are now subject to full income tax and PRSI deductions as with most other forms of Benefit In Kind. Under the BIK rules there is a small benefit exemption clause which allows a gift/bonus of up to €100 in value to be paid to employees tax/PRSI free in any one year. This is increasing to €250 in 2005 as a result of the recent budget. Perhaps this scheme might be worth availing of in order to give your employees a tax efficient Christmas bonus? If you could defer it until the new year then you could avail of the higher limit if relevant.

Click to expand...

Ham Slicer said:

My understanding is that it can't be cash. So vouchers/stock etc. are OK, but cash has to be taxed.

Click to expand...

podgerodge said:

The other link mustn't have been updated.

Click to expand...

podgerodge said:

My understanding too. But the employer says they can't even give vouchers if it is not a gift but a bonus (based on attending an appraisal)

Click to expand...