Tax-Free Tangible Gifts
Are you missing out on the many generous tax-free benefits of gift-giving? Tangible gifts are tax-free under Revenue’s Small Benefits Exemption scheme and their Long Service Awards allowance.
Small Benefits
Exemption
From January 2025, changes to Revenue’s Small Benefit Exemption scheme allow employers greater flexibility to recognise and reward employees throughout the year, in a tax-efficient manner.
1. The annual allowance for non-cash benefits (including tangible gifts) has increased from €1000 to €1,500 per employee. PAYE, PRSI, USC need not be applied to the benefit.
2. The number of occasions allowed to give non-cash benefits to employees has increased from 2 to 5 times per year.
These changes to the Small Benefit Exemption scheme offer employers opportunities to show appreciation to employees and grow a happier workforce.
Long Service
Awards Allowance
Revenue also offers generous tax relief with their Long Service Awards allowance, ONLY when the awards take the form of tangible gifts. PAYE, PRSI or USC need not be applied to the benefit. The allowance is €50 for each year of service, starting at 20 years and every five years after that.
This represents up to 57% savings over long service awards made in the form of cash or vouchers.
The Long Service Awards allowance is separate, and in addition, to the Small Benefit Exemption scheme.
Revenue rules on Long Service Awards
Circumstances in which awards for long service are not taxed:
The award is made to mark long service of not less than 20 years
The award is tangible (that is, not vouchers, bonds or cash)
The cost is not more than €50 for each year of service
No similar award has been made to the employee within the previous 5 years.
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