By Dave Kavanagh

From 1st January 2025, employers can provide up to five, small, non-cash benefits per employee per year, with a combined value of up to €1,500, free of PAYE, PRSI and USC. To qualify, benefits must not be in cash, must not be redeemable (in part or full) for cash, and must be something used to buy goods or services.

So, what type of options/cards qualify to be used for this? Store-specific or multi-store gift vouchers/cards that are used to buy goods/services and cannot be exchanged for cash. E.g. a gift card for a department store, or supermarket, or a retailer. Closed-loop gift cards (cards valid in certain stores or groups of stores) used only to purchase goods/services. Tangible non-cash gifts (e.g. objects, hampers, items) which are similar in value to vouchers, again provided they are used to buy goods/services or are themselves goods. Non-cash benefit cards such as gift cards that are structured so that they are not redeemable for cash or usable like a debit card with direct cash extraction capability.

Options that do not qualify include cards that are redeemable for cash (or partially usable as cash). For example, any gift or “card” that allows the holder to withdraw cash, or exchange for cash. Prepaid debit cards or “spend anywhere” cards if their terms allow the card to be used like cash / cash-equivalent (e.g. ATM withdrawals etc.). If the card is effectively redeemable for or convertible into cash, the revenue rules treat it as a cash benefit and it loses the exemption. Any bonus or benefit provided via payroll or via salary sacrifice. These must be provided outside payroll and not deducted from salary.

With the recent budget not being exceptionally generous to workers, this is a great way to both reward employees without having to tax them further and also benefit employers as gifts are tax deductible.

Dave Kavanagh QFA has been advising people financially for over 25 years. For quotes or information (with no cost or obligation) he can be contacted by emailing info@financialcompanion.ie or use the contact form on www.financialcompanion.ie or @Davekav_advice on Twitter and Instagram. Combined with his previous role of gym/nutrition adviser, he regularly gives talks and workshops at seminars and events for groups, companies and government departments on financial wellbeing, positivity and motivation. As heard on RTE 2FM, LMFM and TV3.