Who qualifies
Any employee whose employer chooses to provide non-cash gifts or vouchers up to the annual limit, with no income tax, USC or PRSI on either side.
How to claim
No employee claim is needed. The employer issues the voucher or gift and reports it through the payroll Real Time Reporting system as a non-taxable benefit.
Detailed explanation
The Small Benefit Exemption allows employers to give employees non-cash benefits free of income tax, USC and PRSI up to a generous annual limit. From 1 January 2025 the limit is 1,500 euro per employee per year, increased from 1,000, and can be made up of a maximum of five separate benefits, increased from two. Both limits carry into 2026 unchanged. The classic use of the exemption is the corporate Christmas voucher, but it now extends to spring or summer rewards, milestone or service-anniversary gifts and one-off recognition awards. The benefit must be non-cash; it cannot be paid in money, by direct credit transfer to a bank account, or in lieu of salary. Most employers use One4all, AllGo, Me2You or similar gift cards. Where the gift exceeds 1,500 euro the entire amount becomes taxable, not just the excess, so employers should keep a careful annual cumulative total. Salary sacrifice does not qualify; the benefit must be additional to normal pay. Where the benefit is given to a director-shareholder of a close company, it must follow the same rules as for employees and is fully reportable through PAYE Modernisation. Couples who both work for the same employer can each receive up to 1,500 euro tax-free, doubling the household benefit. The employer side also benefits because employer PRSI of 11.25 percent (11.40 percent from 1 October 2026) does not apply to qualifying small benefits.
Worked example
Emma earns 50,000 euro and her employer gives her a 200 euro birthday gift card in May and a 1,300 euro One4all voucher in November 2026. Provided no other vouchers are issued, the two together reach but do not exceed the five-benefit, 1,500 cumulative cap and are completely tax-free, saving Emma about 708 euro of tax versus a cash bonus at her 47.2 percent marginal rate. Had the November voucher been 1,500 euro, the cumulative total would have breached the cap and that whole voucher would have been taxable.