Travel passes or air miles
You may provide a monthly or annual travel pass to your employees. Travel passes can include bus, train, Luas and ferry services. This is not a benefit-in-kind.
The bus, train, Luas or ferry pass must be issued by public or private operators who hold valid licences.
Car parking charges may be included in travel passes. These charges are a benefit-in-kind. Your employee must pay Pay As You Earn (PAYE), Pay Related Social Insurance (PRSI) and Universal Social Charge (USC) on this benefit.
Salary sacrifice arrangements
A tax exemption exists for certain salary sacrifice arrangements. Salary sacrifice is where your employee agrees to give up some of their pay in exchange for a benefit. The benefit must be provided by you.
An example of a salary sacrifice is where your employee gives up some of their pay for a travel pass.
This arrangement means that there will be a change to the terms and conditions of employment. Details of this change must be recorded in writing. The agreement cannot cover any period before it was put in place.
Only certain benefits qualify for a tax exemption. These are:
- bus passes
- shares under an approved profit sharing scheme
- bicycles bought through the cycle to work scheme.
Your employee cannot:
- exchange a qualifying benefit for cash
- pass these benefits on to their family.
An employee can hold more than one benefit in a year where the conditions for each benefit are met.
Your employee may receive air miles because of frequent air travel for work. This is not a benefit in kind. Your employee will not have to pay tax on it.