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Blog  »  October 2022  »  Budget 2023: What does it mean for employers? - Blog
Oct 22

Posted by
Saoirse Moloney

Budget 2023: What does it mean for employers?

Budget 2023 was viewed as a chance for the government to take decisive and effective steps to reduce the cost-of-living crisis. The measures announced were implemented against a globalized backdrop of rising prices, worsening fuel crisis and political pressure experienced both by employers and employees. What does it provide for employers?

Increased Small Benefit Exemption

For several years, tax rules have allowed employers to provide one non-cash incentive of up to €500 per year to an employee without incurring a tax charge if certain conditions are met. This is known as a small benefit exemption.

The minister has announced an extension of this scheme, which is expected to be a welcomed move. An employer may provide up to two qualifying awards per year, and the maximum tax-free amount per year has been increased to €1000. This will give employers more leeway in rewarding employees in a tax-efficient manner.

Employers frequently use the incentive as a bonus given to employees at the end of the year in the form of a Christmas voucher. The amendment is set to take effect on 28 September 2022, so the enhanced benefits will be available in the current tax year. The expansion of this scheme will provide employers with a cost-effective way to support their employees and reward their commitment.

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Posted in Employee Contracts, Employment Law