How to Extend the Small Benefit Scheme Year Round

Posted by Gary Purcell on Dec 4, 2017
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Extending the €500 Small Benefit Scheme

With the increase in the tax-free limit for the Small Benefit Scheme to €500 per employee per year, many Irish companies are asking if they can use the scheme to run a year-round employee reward programme in a tax-efficient way.

And the good news is that YES, YOU CAN! 

And with potential tax-savings of over €650, it’s well worthwhile exploring this option.


Points-Based Programmes

Companies can extend the scheme throughout the year in conjunction with a qualifying reward points system. This means that employers can award points to their employees throughout the year, and allow them to “cash-in” their points in December up to maximum of €500 in non-cash rewards.

The advantage of course is that instead of a giving a one-off reward for retrospective performance (company or employee), an ongoing proactive incentive & reward programme can be run throughout the year. This could be in the form of a Performance Incentive, KPI Programme, Safety-at-Work Programme, Wellness Programme, Referral Programme, Recognition Programme, Peer-2-Peer Programme - to name but a few.

As well as enjoying the same tax-free status, ongoing staff rewards programmes can have the advantage of being more engaging and impactful than a single one-off reward.

Example: Allgo Points

The Allgo’s points platform allows employers to run ongoing reward programmes, and is fully approved by Revenue as compliant with the Small Benefit Scheme. The typical year-round programme works like this-

  1. Companies award points throughout the year to staff using Allgo’s online points system. The company decides how many points to award, how often and what the nominal value of each point is. 

  2. The points are accumulated by employees from January to December and their balance is kept on the Allgo points platform. The employee cannot derive any benefit from these accumulated points until December.  A branded reward website keeps employees up-to-date on their accumulated points.

  3. The company can decide to either limit the number of points an employee can earn in a year to €500 worth OR they limit the amount of points an employee can spend, and pay any excess through payroll on December.

  4. Allgo can provide monthly branded eZine updates to all employees on their earned points, and can provide a branded programme website to allow employees check their points balances.

  5. In December, employees are notified to login into the reward website to redeem their points for different gift cards or products from Allgo’s Reward Catalogue (eg gift cards for Dunnes Stores, Arnotts, Brown Thomas, Irish Hotels Federation, DID Electrical etc) OR the points can be automatically converted into a multi-retailer voucher like AllGifts Corporate Voucher or Allgo Rewards Gift Card.
If you would like to discuss introducing a tax-free reward programme in your company, contact Allgo today.


For more about the Small Benefit Scheme, download our definitive guide -

Download €500 Small Benefit Scheme Guide

Tags: small benefit exemption scheme, small benefit scheme, small benefit, staff rewards, points-based incentives, staff rewardstax-free rewards, points programme, employee reward programme

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