Tax free vouchers for employees

Under Revenue’s Small Benefits Exemption Scheme you can give employees a small benefit of up to €500 in value, tax-free, each year. This benefit must not be in cash.

  • The gift voucher must be bought by the employer.  An employee can’t buy a voucher themselves and get money back from their employer.
  • A voucher can be bought for each employee only once a year. If an employee is given a voucher of €250 and another voucher of €250 later in the year only the first €250 will be tax free

Possible tax saved

A person paying 40% PAYE will save up to €520 in tax by availing of this scheme.

Net after tax salary to pay for the voucher is €500

To get this cash in to your hand you need a gross salary €1,042

The difference of €542 is PAYE, USC and PRSI which would be deducted if you got this amount in a salary.

The employer also saves 10.75% Employers PRSI for people on the A class rate of PRSI – the majority of private sector employees.