Revenue have issued guidance on the increased small benefit exemption from 1/1/2025.
From 1 January 2025, you can give employees up to five small benefits, tax-free, each year. These benefits must not be in cash and the combined value of the five benefits cannot exceed €1,500. If more than five benefits are given in a year, only the first five benefits may qualify for the tax exemption. Unused allowance amounts cannot be carried over.
The face value of a voucher is generally the value of the benefit. However, you may incur minor fees or postage charges when purchasing vouchers for your employees. Revenue will not consider such nominal costs in the context of the small benefit exemption threshold. However, where the conditions of the small benefit exemption are not met, these costs must be included when calculating the benefit value for tax purposes.
To qualify for tax-free treatment, the vouchers or benefits must be of a type that can be used only to purchase goods or services. Where they can be redeemed in full or in part for cash, they do not qualify for the small benefit exemption.
For further information issued by Revenue please click here.
Please also note that the vouchers must be included on payroll under the Enhanced Reporting Requirements (ERR) introduced by Revenue in 2024.