Emer Currie (Dublin West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

365. To ask the Minister for Finance the number of PAYE workers to benefit from small benefit exemption in 2023 and 2024; and the total costs to the Exchequer in each year; and if he will make a statement on the matter. [17348/25]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Small Benefit Exemption offers an exemption from Income Tax, PRSI and USC where an employer provides qualifying incentives, such as a voucher or other non-cash benefit, to an employee, subject to certain conditionality.

From 1 January 2023, the number of qualifying incentives increased from one to two per annum and the cumulative annual threshold of those benefits increased from €500 to €1,000 per employee.

Prior to 1 January 2024, the Small Benefit Exemption was not a reportable benefit, and so no data is available with regard to the actual uptake and cost of the measure. However, my Department prepared annual tentative estimates for inclusion in its Tax Expenditures Report. It was estimated that, in 2023, approximately 70,000 PAYE employees received a benefit that qualified for this exemption with the total cost to the Exchequer for that year estimated as approximately €8 million.

Since 1 January 2024, employers must report to Revenue any benefits that meet the conditions of the Small Benefit Exemption where such benefits have been granted without the deduction of tax. I am advised by Revenue that, in 2024, employers reported that approximately 775,800 PAYE employees received a benefit that qualified for this exemption. The total cost to the Exchequer of the Small Benefit Exemption in 2024, estimated by applying a blended tax rate to the value of the benefits reported, is approximately €110 million.

It should be noted that, effective from 1 January 2025, the number of incentives per annum further increased to five, with a cumulative annual threshold of up to €1,500 per employee. As such, it is likely that the cost of this measure will see a further increase in in 2025.