If you would like to thank your staff for their hard work in 2016 without increasing your tax liability, you should consider the small benefit exemption. This allows you to give your employees or directors a voucher or a benefit (a tangible asset other than cash), which cannot exceed EUR500. No PAYE, USC or employer/employee PRSI apply. Please be aware the following conditions apply:
1. You can only give one qualifying voucher or benefit to an employee per tax year: in other words, you cannot give two vouchers with a value of EUR250 each, only one can be given per employee per year.
2. The voucher or benefit cannot exceed EUR500 in value. If it exceeds the threshold of EUR500, the full value is subject to PAYE, USC and PRSI. So for example, if you give your employee a voucher or benefit worth EUR600, PAYE, USC and PRSI is charged on the EUR600, not just on the EUR100 exceeding the threshold.
3. It cannot be exchanged in full, or part, for cash.
4. The employee is not allowed to surrender part of his/her remuneration in exchange of a tax-free voucher or benefit.