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Bonus culture? Not if Revenue can help it!





You've put in a hard year and finally after many tough years of recession, your boss is in a position to reward you with a small "thank you". But watch out: the taxman may be looking over your shoulder waiting to snatch his portion. So, just what is the position when it comes to end-of-year bonuses or gratuities?

Revenue's position is a little curious, but here goes: All cash bonuses are taxable with full PAYE/PRSI attaching.

This includes anything added to your salary as a financial payment, irrespective of what it's called.

Under the once-off small benefit exclusion, an employee is entitled to receive a non-monetary bonus/gift of up to €250.

The most popular way for companies to do this is via a voucher.

This amount is ignored for tax purposes if it's given once during the year. Any amount over this, though, and the whole lot is fully taxed!

Also, if a 'regular' voucher is given, say €50 five times a year, only the first one is allowed tax free; everything else is taxable as 'notional value', i.e. Revenue assumes it's like cash, even if the total amount is under €250.

Items which are given as non-monetary extras over this, e.g. laptops, use of a car etc are taxed as 'benefit in kind', and ascribed a monetary value which must be disclosed.

Happily, corporate outings like this month's Christmas parties won't be taxed so hopefully you'll have enjoyed them without worry!