Does the €1,905 BIK rule apply to my employees?

If an employee's total income, including the value of benefits, is more than €1,905 in a year, the employee must pay tax on the benefits. Income from a previous job is not counted towards the €1,905 limit.

Do I pay tax on BIK if I am a company director?

Yes. A company director must pay tax on any BIK regardless of total income, so the €1,905 threshold does not protect a director.

Are benefits I give to an employee's family members taxable?

Yes. If an employer gives a benefit to an employee's spouse or civil partner, family members, dependants or guests, the employee must pay tax on the benefit.

Is BIK the same as salary sacrifice?

No. BIK is a non-cash benefit an employer provides on top of pay. Salary sacrifice is where an employee gives up part of their cash pay in exchange for a benefit. See our guide to salary sacrifice in Ireland.

Do gift cards and vouchers I give my staff count as BIK?

They can. A gift card or voucher given to an employee has monetary value and is BIK unless an exemption applies. The Small Benefit Exemption covers up to five qualifying non-cash benefits worth up to €1,500 per employee per year.

How do I calculate BIK on a company car?

Revenue sets valuation rules for each type of benefit, including company cars. See Revenue's valuation of benefits guidance, and ask a payroll provider or accountant to apply the figures to a specific situation.

How can I reward my staff without creating a BIK liability?

A qualifying non-cash benefit under the Small Benefit Exemption, such as a CleverCards digital Visa card, avoids BIK entirely up to €1,500 per employee per year, provided the Small Benefit Exemption conditions are met.

Do I have to report BIK to Revenue?

Yes. An employer deducts tax on BIK through payroll and reports the benefits to Revenue. Revenue sets out the BIK reporting obligations here: Fringe benefits: employers reporting obligations.

Benefit in Kind (BIK) in Ireland: The Complete Employer's Guide

~5min reading time Published 6 October 2026 Updated 29 October 2026

If you give an employee something of value outside their normal pay, such as a company car, health insurance or a low-interest loan, Revenue usually treats it as Benefit in Kind (BIK), and it is taxed like salary. For employers, BIK Ireland rules come down to knowing what counts, how it is valued and when an exemption applies. This guide explains what BIK is, how it works, the rules employers often miss, and how to reward staff without triggering it.

What Is Benefit in Kind in Ireland?

Revenue defines a benefit in kind as a non-cash benefit of monetary value that an employer provides for an employee. These benefits can also be referred to as notional pay, fringe benefits or perks. Because they have monetary value, they must be treated as taxable income. Revenue's own explanation is here: What is benefit in kind (BIK)?

How Is BIK Taxed?

Employers must deduct income tax, PRSI and USC under the PAYE system on the value of the benefit. In practice, the value of the benefit is added to the employee's pay and taxed at their normal rates. Revenue publishes valuation rules for each type of benefit, so the taxable value depends on what was provided. See Revenue's valuation of benefits.

Four Rules Employers Often Miss

The €1,905 rule: if an employee's total income, including benefits, is more than €1,905 in a year, they must pay tax on their benefits. Income from a previous job is not counted towards the limit.
Parent companies: if an employee has worked for several businesses under one parent company their combined income from those jobs is measured against the €1,905 limit.
Family and guests: if you give a benefit to an employee's spouse or civil partner, family members, dependants or guests, the employee must pay tax on it.
Directors: a company director must pay tax on any BIK regardless of total income.

Common Benefit in Kind Examples

Company cars and vans made available for private use.
Preferential (below-market-rate) loans from an employer.
Employer-provided accommodation.
Health insurance premiums paid on an employee's behalf.
Gift cards, vouchers and other non-cash gifts, unless an exemption such as the Small Benefit Exemption applies.

What Is Not Taxed as BIK?

Not every perk creates a BIK charge. Some benefits are exempt, and some payments are reimbursements rather than benefits. For the wider picture of what employers offer in Ireland, see our guide to employee benefits in Ireland.
Small benefits: up to five qualifying non-cash benefits worth €1,500 combined per employee per year. See our Small Benefit Exemption guide.
The Cycle to Work scheme: an employer can provide a bicycle and safety equipment tax-free within set limits, with the employee repaying through salary sacrifice. See Citizens Information for the current limits.
Tax-free travel reimbursements: subsistence and mileage paid at or below the civil service rates. See civil service subsistence rates and Revenue mileage rates.

BIK vs the Small Benefit Exemption

	Benefit in Kind	Small Benefit Exemption reward
Tax treatment	Taxed through PAYE as income tax, USC and PRSI	No income tax, USC or PRSI if the conditions are met
Limit	Taxed on its value	Five benefits, €1,500 combined, per employee per year
Form	Any non-cash benefit	Non-cash only, not redeemable for cash
Paid for by	The employer	The employer, not through salary sacrifice
Reporting	Through payroll	Through payroll under Enhanced Reporting Requirements

BIK and Salary Sacrifice

Salary sacrifice is a separate idea: the employee gives up part of their contractual pay in return for a benefit. A benefit that comes from salary sacrifice cannot qualify for the Small Benefit Exemption. Our salary sacrifice guide explains how the two interact.

Your Obligations as an Employer

Identify every benefit you provide and work out whether an exemption applies.
Deduct tax, USC and PRSI through payroll on the value of any taxable benefit.
Report benefits to Revenue. See Revenue's guidance on fringe benefits reporting.
Keep records so you can show how each benefit was treated.

How to Reward Staff Without Creating a BIK Charge

Not every employee reward has to create a BIK liability. The Small Benefit Exemption lets employers giveup to five non-cash benefits a year, worth up to €1,500 combined, free of income tax, USC and PRSI, provided the benefit is genuinely non-cash, is not part of a salary sacrifice arrangement and is reported toRevenue. Use the Small Benefit Exemption calculator to work out the saving, and read our guide to tax-free gift cards for staff.

Rewarding Staff Without BIK, Using CleverCards

CleverCards digital Visacard cards are designed to be given as a non-cash benefit under the Small Benefit Exemption. Instead of adding a taxable perk to payroll, you can issue a CleverCards reward that reaches the employee by email and is tracked in the CleverCards business portal, which makes Revenue reporting more straightforward. Browse employee benefits with CleverCards or explore prepaid cards for businesses.

Frequently Asked Questions (FAQs)

: BIK is a non-cash benefit with a monetary value that an employer gives an employee, often called notional pay, a fringe benefit or a perk. Revenue treats BIK as taxable income, so the employer must deduct income tax, PRSI and USC on the value of the BIK.
: If an employee's total income, including the value of benefits, is more than €1,905 in a year, the employee must pay tax on the benefits. Income from a previous job is not counted towards the €1,905 limit.
: Yes. A company director must pay tax on any BIK regardless of total income, so the €1,905 threshold does not protect a director.
: Yes. If an employer gives a benefit to an employee's spouse or civil partner, family members, dependants or guests, the employee must pay tax on the benefit.
: No. BIK is a non-cash benefit an employer provides on top of pay. Salary sacrifice is where an employee gives up part of their cash pay in exchange for a benefit. See our guide to salary sacrifice in Ireland.
: They can. A gift card or voucher given to an employee has monetary value and is BIK unless an exemption applies. The Small Benefit Exemption covers up to five qualifying non-cash benefits worth up to €1,500 per employee per year.
: Revenue sets valuation rules for each type of benefit, including company cars. See Revenue's valuation of benefits guidance, and ask a payroll provider or accountant to apply the figures to a specific situation.
: A qualifying non-cash benefit under the Small Benefit Exemption, such as a CleverCards digital Visa card, avoids BIK entirely up to €1,500 per employee per year, provided the Small Benefit Exemption conditions are met.
: Yes. An employer deducts tax on BIK through payroll and reports the benefits to Revenue. Revenue sets out the BIK reporting obligations here: Fringe benefits: employers reporting obligations.