Minister for Finance Michael Noonan is to fast track an increase in the value of non-cash bonuses or benefits staff can receive from their employers without paying tax to ensure the change takes effect before Christmas.
The current limit is set at €250 and Mr Noonan’s increase to €500 was expected to take effect from 2016 onwards. The move is contained in the Finance Bill, which was published last week.
The measure is often availed of by companies who give their workers Christmas bonuses of shopping vouchers. The Department of Finance says the changes will be implemented in time for Christmas, an earlier time frame that had been envisaged.
The Finance Bill gives legislative effect to changes announced in last week’s budget but it is understood other tax changes will take effect from January 1st, 2016.
Mr Noonan initially informed the Cabinet of the changes to the benefit in kind exemption measures at its meeting last Tuesday.
Currently, an employer can provide an employee with a once-off, annual non-cash benefit that is not liable for tax. Cash payments are fully taxed.
Mr Noonan is now making provision to increase the maximum value of such a benefit from €250 to €500. Anything above that is subject to PAYE and PRSI.
No more than one such benefit given to an employee in a tax year qualifies for such treatment.