As the year draws to a close, many employers are looking for ways to thank their teams for their hard work, without creating a tax headache in the process.
The Small Benefit Exemption offers a simple, tax-free way to reward your employees. Here’s what you need to know about how this scheme works, what’s changed, and how to make the most of it before year-end.
What Is the Small Benefit Exemption?
The Small Benefit Exemption (SBE) allows employers to give employees up to €1,500 in non-cash benefits each year, free from income tax, PRSI, and USC.
This means you can reward your staff — whether it’s through gift cards or vouchers without incurring extra tax or payroll costs.
The 2025 update to the scheme has made it even more flexible for employers:
- The annual limit remains at €1,500 per employee, but…
- You can now issue up to five separate gifts throughout the year.
How Employers Can Use It Effectively
Here are a few ways to make the most of the Small Benefit Exemption before year-end:
- Track how much of the €1,500 limit you’ve already used to ensure you stay within the annual threshold.
- The exemption applies strictly to non-cash benefits such as vouchers or prepaid cards.
- Maintain clear documentation of when and how the benefits were given to ensure compliance in case of Revenue queries.
Compliance Reminders
To ensure you stay compliant:
- The benefit must be non-cash (cash bonuses do not qualify).
- The total combined value of all gifts in the year cannot exceed €1,500 per employee.
- The benefit cannot be part of salary sacrifice or replace regular pay.
- You must keep records of all transactions and gift values provided and submit these to Revenue as part of the Enhanced Reporting Requirements (ERR).
Need Help Planning Your Year-End Payroll or Benefits?
We help businesses manage payroll, benefits, and year-end compliance — ensuring you make the most of available exemptions and avoid costly mistakes.
💼 Contact us today or book a consultation to review your year-end finance and employee reward strategy.
