Small Benefit Scheme

Yes – you do as it is part of Enhanced Revenue Reporting (ERR), which came into effect from the 1st of January 2024. This new legislation means that you need to report each award made under the Scheme to Revenue.

This is for reporting purposes only, there is no tax implication – the return includes the employee details and the amount of the award. You can make your return directly on ROS, but normally the return is made via your payroll system.

For more details, read our Enhanced Revenue Reporting blog post here.

Yes, you can, as long as the bonus is discretionary and does not form part of the employee’s contractual remuneration package (i.e. specified in the employment contract).

Discretionary bonuses qualify for the Small Benefit Scheme but contractual remuneration does not (as salary sacrifice is not allowed).

Also, the limits of the Scheme mean that a maximum of 2 tax-free bonus rewards can be given in any one year up to €1,000 combined (increasing to 5 awards and combined total of €1,500 from 01.01.2025). This may cover some, but not all, of the bonus amount so anything over the limit would need to be paid via payroll subject to normal tax.

 Sole Traders cannot avail of the Scheme because they do not receive Schedule E income from their businesses. Employees of Sole Traders, however, can avail of the Scheme.

For self-employed people, so long as they are in receipt of “Schedule E” income from their company (on which income tax, PRSI and USC is being deducted), they are entitled to avail of the scheme. Note, however, that as there is no employer PRSI for self-employed workers so the overall tax savings may be 11.05% less than for employed workers.

Yes, they do. No distinction is made by Revenue between full and part-time employees. As long as the person is an employee of the company or business, they can avail of the full €1,000 tax-free limit (increasing to €1,500 on 01.01.2025) regardless of the number of hours they work.

Potentially yes. In understanding whether a company director qualifies for the Scheme, the key factor is whether the director is considered an employee, as the legislation behind the Scheme states that the voucher must be “given to an employee by his or her employer“. Therefore, the following commonly applies –

• Proprietary Director – qualifies for the Scheme as long as they are in paid employment in the company. As proprietary directors are classified as self-employed for PRSI, and there is no employer PRSI for self-employed workers, the overall tax-saving may be 11.05% less than for non-proprietary directors.
• Salaried Director – qualifies for the Scheme as they clearly satisfy the employer / employee relationship requirement.
• Director who receives Directors’ Fees – qualifies for the Scheme as long as the directors fees are paid via payroll (which is the method Revenue recommends).
• Non-Exec Director who receives Dividend Income – though not specifically excluded from the Scheme, these directors may not satisfy the employer / employee relationship requirement. Companies should seek their own specific tax-advice on this.
• Unpaid Directors – normally do not qualify for the Scheme as they are not employed by the company. In some cases, employed directors can forego salary while still being considered employed. Companies should seek their own specific tax-advice on this.