Employee Bulletin November 2022
This bulletin covers two topical issues, which arise following the publication of the Finance Bill 2022.
Small Benefit Exemption
The recent Finance Bill introduces some welcome improvements to the “small benefit exemption” that an employer can pay to its employees annually.
The annual limit has been increased to €1,000 (previously €500).
In addition, the first 2 payments annually to employees can qualify (so long as, in aggregate, they do not exceed €1,000) – previously only the first such payment per annum qualified.
These improvements apply for 2022, i.e., they apply with immediate effect.
Tax free vouchers or benefits can be used only to purchase goods and services. They cannot be redeemed for cash.
If a benefit exceeds €1,000 in value, the full value of that benefit is subject to tax.
Employer PAYE Reporting for certain Benefits
This item was previously circulated in October 2022 as part of our Finance Bill circular.
It is so important that we have included it in this circular also.
The bill provides for a proposed new employer reporting requirement aimed at recording certain tax-free benefits and expenses payments made to employees. Specifically, items covered by:
- the small benefits exemption (covered above)
- the remote daily working allowance of up to €3.20 per day and
- travel and subsistence payments
are all included in the reporting requirement.
This will place an increased compliance burden for employers.
As of yet, Revenue have not provided the prescribed format and manner in which these benefits and expenses will be reported. The legislation itself is subject to a Ministerial commencement order.
Should you have any queries, please let us know.