Since April, an exemption from benefit-in-kind (BIK) has been allowed for monthly or annual bus/train passes provided by an employer to a employee or company director. This exemption is only issued for employee and director journeys on scheduled, licensed transportation services.
Many Family Money readers have asked how to obtain the exemption. BIK primarily concerns the relationship between employer and employee, therefore provision of the benefit is at the company's discretion, says Revenue.
Depending on an employees' earnings, firms that give travel passes to staff may reduce employer PRSI of 12 per cent to 8.5 per cent on that part of the salary. The new exemption has proven controversial because it does not provide a BIK to all employees.
To avail of the exemption, an employer must receive clearance from the local inspector of taxes. Employees may not apply individually - it must come from the company, says Revenue.
Revenue Commissioner leaflet IT-20 outlines all BIK provisions. For a copy of the brochure, call the central telephone information office: (01) 878 0000. Local train and bus companies should also have information.
