€250 tax free for employees and directors

Small Benefit Exclusion- how to give your employees or yourself if you are a director a bonus to the value of €250 tax free

An employer can give an employee a once off voucher to the value of €250 each year without it been taxed or subject to benefit in kind regulations. This also applies to directors. The voucher has to be bought by the employer and given to the employee. The employee can’t buy the voucher themselves and then just get the cash to reimburse them or the employer can’t just simply give the employee the cash, it has to be a voucher.

It only applies to  one voucher per year. So if you give a voucher for €100 during the year and another one for €150 later in the year then only the first one is not taxable and the second €150 will be taxable. In other words in order to avail of the full €250 it has to be given in one go with one voucher.

This is a very tax efficient way to pay employees and also for directors to extract money from the company. It can be availed of once every year to the value of €250.