Small Benefit Exemption Scheme Calculator

Under Ireland’s Small Benefits Tax Exemption Scheme, employers and employees can receive tax-savings for employee benefits they offer their workforce such as employee bonuses. Employers can give their employees up to five tax-free rewards in a year, rather than one, up to combined value of €1,500. With the Small Benefit Scheme, both employer and employee save on taxes like PAYE, PRSI and USC. Use the calculator below to enter your benefit amount and number of employees to see your total tax savings instantly

How Does The Small Benefit Exemption Scheme Help Businesses?

When employers give cash gifts or bonuses, they're treated like regular salaries, which means that both the employer and the employee pay taxes on this reward. Employees are required to pay taxes like PAYE, PRSI, and USC. While employers pay PRSI on the bonus This created a lose-lose situation. Rewards cost businesses more while employees receive less. To fix this, Revenue introduced the Small Benefit Exemption Scheme. The goal was to encourage employee rewards without a heavy tax burden. With this scheme, employers can now give employees tax-free rewards of up to €1,500 each year. A €1,500 bonus that would normally cost businesses €3,470.31 after tax, now costs just €1,500. While employees receive the full benefit of their reward.

Small Benefits Exemption Scheme Calculation Examples

Here are some examples of how much your business could be saving with the Small Benefits Exemption Scheme

Small Benefit Exemption Scheme Rules

To get an exemption under the SBE scheme, businesses must follow the rules set by Revenue. This includes:

1. Non-cash Benefit Only: The reward must be a non-cash benefit. Acceptable gift options include gift cards, gift vouchers or tangible gifts. Any benefit that can be exchanged for cash is not allowed.
2. Benefit Limit €1,500: Each employee can receive a tax-free benefit of €1,500 each year. Employees can either send five benefits or one; the cumulative value should be €1,500. If the total value exceeds the exemption limit, the entire amount is taxable.
3. No Salary Sacrifice: The scheme cannot be used as part of a salary sacrifice arrangement. In other words, employers cannot reduce an employee's salary in return for a tax-free reward. The benefit only qualifies if the reward is an addition to regular pay.
4. Real-time Reporting: From January 2025, employers must report every qualifying benefit to Revenue in real time, just like payroll reporting.

Benefits Of The Small Benefit Exemption Scheme

Cost Saving

Reward employees without a heavy tax burden. Save your business up to €1,970 per employee per year with tax-free rewards.

Tax-Compliant

Fully aligned with Revenue’s rules, the scheme ensures you stay compliant while rewarding staff, avoiding PAYE, USC, and PRSI complications.

Full Benefit Value

Employees receive 100% of the reward value, making gifts more meaningful and boosting morale, loyalty, and engagement.

How To Claim Exemption Under The Small Benefit Exemption Scheme

Rewarding employees tax-free is simple, but businesses must be careful not to breach any rules set by Revenue. Here is how employers can reward employees tax-free in three steps

Find Qualifying Benefit

Depending on your employee preferences, pick a gift that qualifies under the scheme. This could vary from gift cards to vouchers or even physical gifts like hampers.

Set Gifting Limit

Plan gifts and set a strict budget restriction of €1,500. Ensure the total value of benefits given to each employee does not exceed €1,500 in a calendar year.

Report To Revenue

Report employee rewards to Revenue in real time through payroll submissions. Each report should include the employee’s PPS number, the type of benefit provided, its value, and the date it was given.