Budget 2020, announced yesterday by Finance Minister, Paschal Donohoe, made no changes to the thresholds or rules for Small Benefit Scheme.
So for 2020, as in 2019, Irish employers will still be able to reward employers up to €500 per year without any Benefit-In-Kind (BIK) tax for the employee, or employer tax (Employer PRSI) for the company. The 4 Core Rules of the Scheme remain in force-
Tax- Saving Calculations
With minimal change to the key Employee taxes, the savings available on the Small Benefit Scheme in 2020 will be very similar to 2019:
Small Benefit Tax Savings - by Employee Salary
Small Benefit Tax Savings - by Company Size
Tax-Savings Calculations based on –
• 2020 Budget figures
• Awarding full €500 per employee under the Small Benefit Scheme
• Tax rate for single employee with normal allowances and tax credits as follows
Income Tax
- 20% PAYE up to €35,300
- 40% above that
Employee PRSI
- Under €18,304 = 0%
- 4% above that
USC
- First €12,012 salary @ 0.5%
- Next €7,862 salary @ 2%
- Next €50,170 salary @ 4.5%
- Balance of salary @ 8%
Employer PRSI
- Under €20,072 = 8.7%
- 10.95% above that.
Guide to Small Benefit Scheme 2019
Our 2019 Expert Guide to the Irish Revenue’s tax-free employee reward scheme gives you expert info, insights and case studies for getting the most out of the scheme. Download it for free today by clicking the Download Now.