Taxation of benefit in kind
Estimating the value of benefits
The employer must deduct tax on the value of benefits they provide to employees. Valuation of benefits describes how different types of benefits are valued.
If the employer knows a benefit's value
If the employer knows how much a benefit is worth, they must calculate the tax on the actual value of the benefit.
If the employer does not know a benefit's value
If the employer does not know how much a benefit is worth, they must calculate tax on its estimated value. This should be the best estimate, from a common sense point of view. Please refer to Valuation of benefits for guidelines on how benefits are generally taxed.
The employer must include a best estimate of the value in the relevant payroll submission to Revenue. When the actual value of the benefit becomes available, the employer must include any adjustment in the next payroll submission.
Some taxable benefits have special rules. These are:
Next: Applying tax to benefits