# Small Benefit BIK Exemption



## podgerodge (29 Nov 2005)

I am aware of the Eur250 small benefit BIK exemption currently allowed.  My employer states that as the payment to staff each christmas is not a gift but a "bonus" based on a performance review, the exemption does not apply and the 250 is fully taxable.

Any ideas?


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## ClubMan (29 Nov 2005)

Isn't the small benefit _BIK _exemption threshold actually €100 and not €250? See section 2.3 of the _Revenue_ [broken link removed]. The guide makes no mention of this payment needing to be a gift. However if that is a requirement then maybe you can convince your employer to pay €100 of it as a gift rather than as salary (assuming that this is legitimate)? On the other hand, in the greater scheme of things (e.g. in relation to total annual earnings) the benefit is likely to be marginal.


> *2.3 Small benefits
> 
> *Where an employer provides an employee with a small
> benefit (that is, a benefit with a value not exceeding
> ...


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## Ham Slicer (29 Nov 2005)

podgerodge said:
			
		

> I am aware of the Eur250 small benefit BIK exemption currently allowed.  My employer states that as the payment to staff each christmas is not a gift but a "bonus" based on a performance review, the exemption does not apply and the 250 is fully taxable.
> 
> Any ideas?



My understanding is that it can't be cash.  So vouchers/stock etc. are OK, but cash has to be taxed.


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## podgerodge (29 Nov 2005)

ClubMan said:
			
		

> Tax/PRSI exemptions for bonus bonds were removed at the start of this year if I'm not mistaken and they are now subject to full income tax and PRSI deductions as with most other forms of Benefit In Kind. Under the BIK rules there is a small benefit exemption clause which allows a gift/bonus of up to €100 in value to be paid to employees tax/PRSI free in any one year. This is increasing to €250 in 2005 as a result of the recent budget. Perhaps this scheme might be worth availing of in order to give your employees a tax efficient Christmas bonus? If you could defer it until the new year then you could avail of the higher limit if relevant.



I was relying on the above 
Think it is Eur250 now though


The other link mustn't have been updated.
If it is 250, It would be over a 100 euros in my pocket rather than theirs!


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## podgerodge (29 Nov 2005)

Ham Slicer said:
			
		

> My understanding is that it can't be cash.  So vouchers/stock etc. are OK, but cash has to be taxed.



My understanding too.  But the employer says they can't even give vouchers if it is not a gift but a bonus (based on attending an appraisal).  By the way the bonus is bigger than 250 - but I was angling as Clubman suggested, on getting 250 in vouchers and being taxed on the rest.


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## ClubMan (29 Nov 2005)

podgerodge said:
			
		

> The other link mustn't have been updated.


Yes - apologies for any confusion caused!


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## Ham Slicer (29 Nov 2005)

podgerodge said:
			
		

> My understanding too.  But the employer says they can't even give vouchers if it is not a gift but a bonus (based on attending an appraisal)



All I can say is that your employer is not very accommodating.


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## RainyDay (29 Nov 2005)

To be honest, it sounds to me like the employer is sticking to the spirit of the legislation, which is not intended to allow bonuses or parts of bonuses to be paid under the table in this way. Fair play to the employer, IMHO.


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