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Small Benefit Scheme

Everything you need to know about The Small Benefit Scheme –  the €1,500 Tax-Free Reward Scheme for Irish Employers.

The Best Employer Tax-Break in Ireland!

The Small Benefit Scheme (SBS) is a statutory tax relief scheme offered by Irish Revenue that allows employers to provide a tax exempt benefit to Irish employees of up to €1,500 per year.

The Scheme allows you to give certain rewards to your employees that are NOT subject to Benefit-In-Kind (BIK) tax for the employee, or employer tax (Employer PRSI) for the company.

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Small Benefit Scheme – 4 Key Rules

To provide tax-free rewards to employees under the Scheme, you must adhere to 4 basic rules:

1

Below the €1,500 Threshold

The benefit cannot exceed the threshold, which was increased from €1,500 on 1st January 2025. The employer can award a lower amount than €1,500, or different amounts to different employees, but no employee can receive more than €1,500 in any one year.

2

Maximum 5 rewards per Year

The benefit can only be given a maximin 5 times per year up to a total combined value of €1,500. As the tax year in Ireland is January 1st – December 31st, this means that an employer can make a €500 award to an employee in January and in February, and then a third €500 award in December without any income tax, PRSI (employer or employee) or USC .

3

Non-Cash

The benefit must be in non-cash form that cannot be converted into cash. This means that it cannot be paid through payroll, or for example on any company expense credit card that could be used at an ATM to withdraw cash.

4

No Salary Sacrifice

The benefit cannot be funded from a deduction in salary from the employee, so the company needs to be invoiced for the total benefit amount, and needs to pay for the total value of the rewards from the company’s own funds.

Tax Savings – Calculations

Tax-Savings Calculations based on

  • 2025 Budget figures
  • Awarding full €1,500 per employee under the Small Benefit Scheme (WITHOUT GROSSING UP THE COSTS)
  • Tax rate for single employee with normal allowances and tax credits
  • Tax savings by company size based on savings per employees on higher rate of income tax (40%)

Two Is Better Than One: Amplify + AllGo Mastercard

Combining the power of the Amplify points-based reward & recognition system with the AllGo Mastercard Gift Card optimises the Small Benefit Scheme for Irish Employers-

  1. Reduces Administration.
  2. Ensures Tax-Compliance.
  3. Delivers Greater Impact with Employees.

 

Our sister brand, Amplify, is a world-class technology platform for managing employee recognition, incentive & reward programmes.

Together with AllGo Mastercard Gift Cards, they are powerful combination!

Two is Better Than One

To learn more about combining AllGo Mastercard and Amplify, please visit our sister website amplifysuccess.com/recognition-hub

How It Works

1
Set the Budget

Each company decides what their points are worth (eg €1), and how many points to award for each element of the programmes – eg Service Awards, Manager Awards, Peer Recognition, EOTM, Birthday Rewards, Safety, Training, Referrals etc.​

2
Award Points to Staff

Points are awarded to staff in throughout the year – either automatically (eg Service Awards), by nominations (eg peer recognition), or with points uploads (eg team awards). Points are emailed to staff and added to each employee’s online balance.​

Convert Points

Each company decides how many times per year accumulated points will be converted into tax-free gift cards. The points conversion module manages the reporting and ensures no employee exceeds the Small Benefit limits.

3
4
Issue the AllGo Mastercard

Once the company has approved the Points Conversion Report, and made the required Enhanced Revenue Report (ERR) return to Revenue, employees will be sent an AllGo Mastercard Gift Card to the value of the points converted.

Small Benefit Scheme Guide

Download this free pdf to get all the details on how to reward employees tax-free in Ireland.

This Guide Covers-

  • Small Benefit Rules
  • Tax-Saving Calculations
  • Best Gift Cards Options for Staff
  • Revenue Returns – Enhanced Revenue Reporting
  • Paying Bonuses Tax-Free
  • Year-Round Tax-Free Rewards
  • Other Staff Tax Saving Schemes
  • Small Benefit FAQs
AllGo Small Benefit Guide - 8th Edition

Small Benefit Scheme – Top FAQs

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 5 tax-free bonus rewards can be given in any one year up to €1,500 combined. 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 11.15% 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 €1,500 tax-free limit 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 11.15% 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.
See All Small Benefit FAQs

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