Question 1

What is a tax-free employee benefits card?

Accepted Answer

A tax-free employee benefits card is a prepaid card like the one offered by CleverCards. These cards are pre-funded by employers and sent to employees. As per the Small Benefit Exemption Scheme, employers can load up to €1,500 annually as a non-cash benefit, completely tax-free.

Question 2

Can I give a tax-free gift to employees in Ireland?

Accepted Answer

Yes, the Small Benefit Exemption Scheme allows employers to give employees and directors non-cash gifts like gift cards or vouchers worth up to €1,500 without paying any tax on them. To qualify, the gift must be non-cash in nature. If cash is offered as a gift, it is considered income, and taxes like PAYE, PRSI, or USC Charges are levied on it.

Question 3

How do I use CleverCards?

Accepted Answer

Using CleverCards is simple. Employees receive their individual digital cards over email. The card can then be activated with one click and added to Google Pay or Apple Pay. Since the card is prepaid and Mastercard-powered, employees do not need to spend out of pocket, and it can be spent at over 50 million merchants worldwide, both online and in-store.

Question 4

Do employers have to tax gift cards given to employees?

Accepted Answer

No, gift cards are tax-free in Ireland up to €1,500 per employee per year, provided they meet the requirements under the Small Benefit Exemption Scheme. If the value exceeds €1,500, then the entire amount becomes taxable.

Question 5

How much money can you gift someone tax-free in Ireland?

Accepted Answer

Employers can gift employees up to €1,500 per employee, per year, tax-free through the Small Benefit Exemption Scheme as long as the gift is a non-cash benefit, such as a gift card, vouchers, or physical gifts.

Question 6

What is the gift tax in Ireland?

Accepted Answer

In Ireland, gifts are generally taxed under Capital Acquisitions Tax (CAT). However, for employees, there is an exemption under the Small Benefit Exemption Scheme, which allows employers to give non-cash benefits such as gift cards worth up to €1,500 per year completely tax-free. If the value of the benefit goes above €1,500, the full amount becomes taxable through PAYE, PRSI, and USC.

Question 7

Which gifts are exempt from gift tax in Ireland?

Accepted Answer

In Ireland, non-cash benefits such as gift cards, gift vouchers, and tangible gifts like jewellery, watches, bags, t-shirts, etc, are exempt from tax up to a specified limit. However, if cash is offered as a gift or any gift that can be exchanged for cash, then it is not exempt.

Question 8

What happens if the tax-free gift limit is exceeded?

Accepted Answer

If the value of the gift card or voucher given to an employee exceeds €1,500 in a year, the entire amount (not just the excess) becomes taxable. The gift will then be treated as a benefit-in-kind and subject to PAYE, PRSI, and USC.

Question 9

How many tax-free gifts can an employee receive in a year?

Accepted Answer

Employees can receive up to five tax-free benefits per year, provided the combined total value does not exceed €1,500. If the combined amount is above the limit, the full value becomes taxable.

	Through Payroll	Through
Total payment to employees	€31,249.95	€15,000.00
PAYE at 40%	€12,499.98	€0.00
USC at 8%	€2,500.00	€0.00
PRSI at 4%	€1,250.00	€0.00
Net Reward per employee	€1,500.00	€1,500.00
Employer PRSI at 11.05%	€3,453.12	€0.00
Total cost to employer	€34,703.07	€15,000.00 Tax Savings: €19,703.07

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