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 is 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) are 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 must report the value of all taxable benefits and share based remuneration in their payroll submission to Revenue.

Next: Spreading tax over the year

Published: 23 September 2026 Print this page

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