Taxation of benefit in kind
Applying tax to benefits
For tax purposes, the employer should treat the value of a benefit as notional pay. The employer should include any notional pay with the employee's pay in the pay period the benefit was given.
Notional pay must be reported by the employer to Revenue, on or before the day the notional payment is made to the employee.
The employee's Income Tax, Pay Related Social Insurance (PRSI) and Universal Social Charge (USC) is calculated on the combined total of pay and notional pay. These taxes must all be deducted from the employee's pay. Employer's PRSI is also due on the combined total of the pay and the benefit value.
The employer does not need to show the value of a benefit on their employees' payslips. However, the employer must report the value of a benefit and share based remuneration on their payroll submission to Revenue.
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