Other Benefits

Company Shares

Where shares in a company are given by the company to an employee free of charge or at a discounted price or under a share scheme, the employee is chargeable to tax on the benefit accruing to him or her. However, PAYE and PRSI do not apply. The benefit must be returned on the employee's return of income form. The employer must also make a return of the benefit on form SO2 or form P11D, whichever is appropriate, by the appropriate due date.

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Pension Contributions

PAYE and PRSI should not be applied to pension contributions paid by an employer in respect of an employee to Revenue-approved superannuation schemes and Personal Retirement Savings Accounts (PRSA's).

However, while PAYE and PRSI do not apply to an employer's contribution to an employee's PRSA, the contribution is nevertheless a taxable benefit in the employee's hands, subject to relief up to certain limits, and must be returned by the employer on form P11D.

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Meals and Meal Vouchers

Canteen Meals

A taxable benefit does not arise in respect of free or subsidised meals in staff canteens where meals are provided for the staff generally. The facility must be available to all employees. Otherwise, the exemption does not apply. In the event that a taxable benefit does arise, the running costs must be apportioned, in a reasonable manner between those employees entitled to use the canteen, and taken into account as notional pay for PAYE and PRSI purposes. No cost should be attributed to an employee who specifically indicates that s/he does not wish to, and does not use the facilities provided.

Meal Vouchers

Where an employer provides luncheon or meal vouchers to employees a taxable benefit arises and the face value of the vouchers (disregarding 19c per voucher) must be taken into account as notional pay for PAYE and PRSI purposes.

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Crèche/Childcare Facilities

Employer-provided facility

With effect from 1 January 2011 where an employer provides free or subsidised childcare facilities a taxable benefit will arise. The value of the taxable benefit will be calculated as follows-

  • Any expenses (other than the cost of acquisition) incurred by the employer in connection with the provision of the premises, e.g. insurance, maintenance etc. and
  • The annual value of its use.

Prior to 2011 no taxable benefit arose in respect of the provision of free or subsidised childcare facilities by employers for their employees where the childcare facility was provided on premises which -

  1. met certain requirements of the Child Care (Pre-School Services) Regulations 1996, and
  2. were made available-
    • solely by the employer
    • by the employer jointly with one or more other participants in a joint scheme and the employer was wholly or partly responsible for either -
      • financing and managing the facility, or
      • providing capital for the construction or refurbishment of the premises, or
    • by any other person or persons and the employer was wholly or partly responsible for either -
      • financing and managing the facility, or
      • providing capital for the construction or refurbishment of the premises.

Independent facility

Where the above conditions are not complied with, e.g. where an employer merely pays for or subsidises the cost to an independent crèche or child care facility, the cost borne by the employer is a taxable benefit and PAYE and PRSI must be applied accordingly. In such circumstances, where an employer makes a block payment to a crèche or childcare facility, the amount paid should be apportioned and treated as notional pay of the respective employees. The apportionment of the block payment should be based on the facts, including the number of children concerned for each employee, and should lead to a result which is fair and reasonable.

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Sports and Recreational Facilities

Facilities provided on the employer's premises

Where sports and recreational facilities are made available on the employer's premises for the use of employees generally, a taxable benefit is not treated as arising. The facility must be available to all employees. Where the facilities are not available to all employees there is a taxable benefit. The taxable benefit should be computed by apportioning the running costs in a reasonable manner between those employees entitled to avail of the facilities. No cost should be attributed to an employee who specifically indicates that s/he does not wish to, and does not use the facilities provided.

Corporate Membership paid by the employer

Where a corporate subscription to sports or recreational facilities is paid by an employer on behalf of an individual employee or specified employees, the amount paid must be treated as notional pay for PAYE and PRSI purposes.

Example 1

Where an annual corporate subscription of €10,000 is paid for club membership and use of the club is confined to 10 specific employees, the notional pay to be taken into account for each employee is €1,000 per annum.

Where a "group" membership is paid by the employer on behalf of employees generally, the cost incurred by the employer should be divided equally among all the employees who are entitled to and indicate an intention to participate in the scheme. No cost should be attributed to an employee who specifically informs the employer that he does not wish to, and will not, participate in the group scheme.

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"En Bloc" Payments

Where a block payment (or an en bloc payment) is made by the employer in providing a benefit on behalf of employees generally, the payment should be divided equally amongst the employees entitled to benefit from the payment. No cost should be attributed to an employee who specifically indicates that they do not wish to, and therefore will not benefit.

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In-House Medical Plans/Corporate General Practitioner Services/Medical Check-ups

Some employers operate in-house medical plans under which employees contribute to and claim from the plan. Employers will in some cases contribute to the plan to the extent that the aggregate claims by employees exceed the aggregate contributions made by employees in the relevant year.

In other cases, employers may employ or pay a retainer to a general practitioner. In such circumstances PAYE and PRSI should not be applied to any benefit arising from the employer's contribution to the plan or payment of the general practitioner.

Medical Check-ups

The provision of one medical check up per annum at the expense of an employer will not be regarded as a taxable benefit.

The provision of medical check-ups which employees are required to undergo by their employer will not be regarded as taxable benefits.

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Staff Discounts

Price above cost to the employer

  • A discount, given by an employer (e.g. an employer in the retail sector) on the purchase of goods by an employee, is not regarded as a taxable benefit if the sum paid by the employee is equal to or greater than the cost to the employer of acquiring or manufacturing the goods and
  • The goods cannot reasonably be converted into money or money's worth.

Price below cost to the employer

Where goods are sold below the employer's cost and the goods cannot reasonably be converted into money or money's worth, the difference between that cost and the price paid is a taxable benefit and PAYE and PRSI must be operated on this amount.

Note: Staff availing of such discount may not avail of small benefit concession in the same year of assessment.
See Overview of System - Small Benefits

Where goods can be converted into money or money's worth

Where goods can be converted into money or money's worth refer to: Valuation of Benefits - General: Goods Provided by Employer.

The value at: Valuation of Benefits - General: Goods Provided by Employer may be reduced by any amount made good by the employee to the employer.

In-house vouchers / discount notes

Any scheme relating to the provision of in-house voucher(s)/discount note(s) to employees based on their past purchases, which may be redeemed against any future purchases will not be exempt from BIK.

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Christmas parties and other inclusive events

Where an employer provides staff Christmas parties, special occasion meals or other inclusive events, such as sports days for staff, a taxable benefit will not be treated as arising where the expenses are reasonable.

Travel Passes

PAYE and PRSI should not be applied to the value of certain monthly or annual bus, train and ferry passes given to employees for use on a licensed passenger transport service. Please refer to: Exemption for Monthly/Annual Bus, Train or Ferry Passes: "Salary Sacrifice" Arrangements for details.

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Car Parking

Car parking facilities provided by an employer to employees are not treated as giving rise to a taxable benefit.

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Work-related supplies

Office accommodation, furniture, supplies or services provided for the director or employee on the business premises and used by him or her solely in performing the duties of his or her office or employment do not give rise to a taxable benefit. In other words, facilities used solely for business purposes are tax-free and PAYE and PRSI are not to be applied to their value.

As regards eWorkers please see: Leaflet IT69: e-Working and Tax

This leaflet deals with tax implications of eWorking employees. eWorking is regarded as a method of working using information and communication technologies in which work is carried out independent of location. Ways of eWorking include:

  • Working at home on a full time or part time basis
  • Working some of the time at home and the rest of the time in the office
  • Working while on the move, with infrequent or occasional visits to the office.

eWorking involves:

  • Working for substantial periods outside the employer's premises
  • Logging onto the employers computer remotely
  • Sending and receiving email, data or files remotely
  • Developing ideas, products and services remotely.

The number of employees eWorking is increasing and this leaflet addresses some of the more important issues that affect them.

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Laptops and Hand Held Computers

Where an employer provides an employee with a laptop for business use, a taxable benefit will not be treated as arising where private use is merely incidental to the business use of the laptop.

Where an employer provides an employee with a hand held computer for business use, a taxable benefit will not be treated as arising where private use is merely incidental to the business use of the hand held computer.

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Home High-Speed Internet Connection

Where an employer provides an employee with a home high-speed internet connection (DSL, Broadband or similar technology) for business purposes and the employer bears the costs of its instillation and use, a taxable benefit will not be treated as arising where private use is merely incidental to the business use of the connection.

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Computers and Other Equipment provided in Employee's Home

A taxable benefit will arise on an employee in respect of a computer or other equipment provided in an employee's home for the employee's private use. The notional pay is calculated in accordance with the rules set out in (Free Use of Assets other than accommodation, company cars or vans), i.e. 5% of the market value of the asset when first provided as a benefit.

Example 2

An employer provides a computer, printer and ancillary equipment to an employee for private use at home. The employer retains ownership of the equipment. The original cost of the equipment to the employer was €3,000. The equipment is first provided to an employee for home use on 1 January 2007 when it has a market value of €2,500.

The notional pay of the employee for the year 2007 (and subsequent years) arising from the private use of the equipment is €2,500 x 5% = €125 (€2.40 per week / €10.41 per month).

However, a taxable benefit will not arise where the computer or other equipment is provided in the employee's home for business purposes and private use is incidental.

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Telephone provided by the employer

Where a dedicated home telephone line or mobile telephone (and ownership of the telephone is not transferred to the employee) is provided by an employer specifically for business use, and is used for that purpose with private use being incidental, then no charge to tax arises in respect of the cost of the telephone (line rental plus calls only).

Use of own telephone for business purposes

No charge to tax arises where an individual is reimbursed by his/her employer for actual expenditure incurred, including the relevant proportion of line rental, in respect of business use of a private telephone line or personal mobile telephone.

Where the individual's own private telephone line or personal mobile telephone is used for business purposes the proportion of the cost of the telephone bill (line rental plus calls only) relating to the business use of the phone may be paid, or reimbursed, tax-free by the employer on the basis of a reasonable estimate of the business use of the phone. Records in support of the calculation of the amount reimbursed tax-free must be kept for inspection by Revenue. See Records to be kept – Audit of Records.

Example

Total phone bill
(includes €40 line rental)   	€120
Business use estimate 25% 	     €30 may be paid tax-free

Where the duties of an employment require certain employees to be on call outside normal working hours and there is otherwise no business use of the phone, and the employee's own private telephone line or personal mobile phone is used for such purposes then an amount equal to 50% of the cost of the line rental may be paid free of tax.

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Corporate Charge Cards

Business Use Only

Where the charge card is provided by the employer to the employee exclusively for business use, any annual membership or stamp duty paid by the employer in connection with the card will not be regarded as a taxable benefit.

Business and Private Use

Where the card can be used by the employee for private purchases, or other private payments, any amounts paid in respect of the employee's private purchases, or for other non-business purposes, and not made good by the employee to the employer will be taxable benefits and PAYE and PRSI will apply.

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Course or exam fees

Refunds of course or exam fees to an employee which have been paid by the employee, or direct payments of course or exam fees by the employer, will not be treated as giving rise to a taxable benefit where the course undertaken is relevant to the business of the employer.

A course is regarded as relevant to the business of the employer where it leads to the acquisition of knowledge or skills which are -

  • necessary for the duties of the employment, or
  • directly related to increasing the effectiveness of the performance of the director's or employee's present or prospective duties in the office or employment.

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Professional subscriptions

Where the employer pays a subscription to a professional body on behalf of an employee, or reimburses the employee who has paid such a subscription, a taxable benefit or emoluments will not be treated as arising if membership of that professional body is relevant to the business of the employer.

Membership of a professional body can be regarded as relevant to the business of the employer where it facilitates the acquisition of knowledge which is necessary for the duties of the employment, or directly related to the performance of the director's or employee's present or prospective duties in the office or employment.

Where membership of a professional body cannot be so regarded as relevant to the business of the employer, the subscription paid by the employer directly or by reimbursement will be regarded as a taxable benefit, to be included as notional pay or emoluments for PAYE and PRSI purposes. For further information see Revenue eBrief No. 19/11.

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Provision of newspapers, periodicals etc.

Where an employer provides employees with free periodicals, newspapers etc. which are generally related to the employer's business a taxable benefit will not be treated as arising.

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Security assets or services

Subject to certain conditions being met, where an employer incurs expenses in providing a security asset or service for use by a director or employee no benefit-in-kind charge will arise. In order to qualify for this exemption, there must be a credible and serious threat to the personal physical safety of the director or employee that arises wholly or mainly from his/her employment. This exemption is intended only for those people whose work exposes them to a very real threat to their physical safety and the provision of the security asset or service is for the sole purpose of meeting that threat.

An asset includes equipment or a structure (for example - alarms, security cameras and security gates) but does not cover any mode of transport (i.e. cars, vans, crew cabs etc.) or a dwelling (i.e. living accommodation) or grounds appurtenant to a dwelling (i.e. land).

It follows that a deduction cannot be granted for:

  • security measures against the kind of general criminal threat which all citizens face to a greater or lesser degree
  • expenditure incurred to protect against a threat to property (from burglary or larceny), or
  • security measures taken against threats not connected with a person's work.

Incidental use of an asset for purposes other than security will not impact on the exemption. Any incidental benefit derived by a member of the director or employee's family or household from the provision of a security asset or service will not give rise to a BIK charge. However, where the asset provided is intended to be used for personal security purposes and other purposes, then the exemption will only apply to the portion of the expense relating to the security function. In the case of the provision of a security service, the exemption will only apply where the benefit resulting to the director or employee consists wholly or mainly of an improvement in the director or employee's personal physical security.

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Examination Awards

Reimbursement of Expenses

Examination Awards made to an employee, in the context of passing an examination, or acquiring a qualification which bears some relationship to the employees duties, will not be treated as giving rise to a taxable benefit. This treatment is subject to the condition that the award is an amount that can reasonably be regarded as a reimbursement of expenses likely to have been incurred in studying for the qualification or sitting the examination.

Special Increments

Special increments of salary awarded on passing an examination or other such " recognition" payments are chargeable as part of an employee's remuneration in the normal way.

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Exceptional Performance Awards

Taxable Benefits

Where an employer has a scheme in place to reward exceptional performance, any awards received under such schemes are taxable benefits. The treatment is as follows:

  • Where the award is made in cash, it must pass through the payroll system and PAYE/PRSI must be applied to the amount of the award.
  • Where the award is made by way of gift or voucher, the value of the gift or voucher is a taxable benefit to which PAYE and PRSI must be applied.

"Tax-free" awards must be grossed up.

If an employer wishes to discharge the tax on the exceptional performance award made, whether in the form of cash or in the form of gifts or vouchers, so that the awards are made to the employees concerned "tax-free", the value of each award made must be grossed up for the purposes of computing the PAYE and the PRSI to be remitted by the employer. Please refer to paragraphs 4 and 5 of Application of PAYE and PRSI to Benefits Employer - arrangements to discharge employees' liabilities to tax and PRSI in relation to grossing-up.

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Staff Suggestion Schemes

The previous practice regarding such schemes is withdrawn with effect from 1 January 2004. Awards made on or after that date under Staff Suggestion Schemes are to be treated as giving rise to a taxable benefit and PAYE and PRSI must be applied to the value of the award.

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Long Service Awards

A taxable benefit does not arise in respect of Long Service Awards where the following conditions are satisfied -

  • the award is made as a testimonial to mark long service of not less than 20 years
  • the award takes the form of a tangible article(s) of reasonable cost
  • the cost does not exceed €50 for each year of service, and
  • no similar award has been made to the recipient within the previous 5 years.

This treatment does not apply to awards made in cash or in the form of vouchers, bonds etc. Where any of the conditions in the previous paragraph are not met PAYE and PRSI must be applied to the value of the award.

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Entry Visas and Work Permits

The costs incurred by an employer on behalf of an employee in respect of that employee's entry visa or work permit are treated as not giving rise to a taxable benefit.

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