What is the tax-free gift card allowance in Ireland?

The tax-free gift card allowance in Ireland is €1,500 per employee per year under the Small Benefit Exemption Scheme. These allowances reset each year on January 1st and apply to all salaried employees.

How much can employers give staff tax-free in Ireland?

Employers can offer staff up to €1,500 each year tax-free. This limit is cumulative of all qualifying benefits, so whether the employer is giving five benefits or one, the total value must not exceed €1,500.

Can companies give digital gift cards tax-free?

Yes, digital gift cards are considered tax-free, provided they cannot be redeemed for cash and do not exceed €1,500 per employee per year. For example, CleverCards Mastercard gift card is a digital card and is issued and sent 100% digitally and can be used to reward employees tax-free.

Are tax-free gift cards only for employees?

The Small Benefit Exemption Scheme applies to employees, but the definition includes various employment. Directors, part-time employees and seasonal employees also qualify as long as they are on payroll.

Can I buy tax-free gift cards in bulk for staff?

Yes, CleverCards allows you to buy tax-free gift cards in bulk with just a few clicks. All you need to do is select the card, upload a CSV of employee details and send all the cards instantly.

What happens if the allowance limit is exceeded?

If the total value of benefits exceeds €1,500 per employee, the entire amount becomes taxable as income, not just the excess. This is why revenue requires employees to maintain accurate reporting of all gift allowances.

Tax-Free Gift Cards

For Businesses In Ireland

Irish tax rules allow employers to reward staff with tax-free gifts, such as digital cards. Gifting should feel meaningful for both the business and the employee. Tax-free gift cards benefit businesses while employees enjoy the full value of their gift.

What Are Tax-Free Gift Cards?

Tax-free gift cards are prepaid payment cards that qualify for Ireland's Small Benefit Exemption Scheme. This scheme allows employers to send employees gifts tax-free up to a limit of €1,500 per year. With a tax-free gift, employees receive the full value of the card without incurring any additional taxes.

Types Of Tax-Free Gift Cards

Understanding the right type of gift card helps businesses select the most appropriate options for their employees.

Physical Gift Cards

Physical gift cards are traditional, tangible plastic cards that can be used on a card machine or online. While familiar, these cards require printing and postage to reach employees and are often lost.

Digital Gift Cards

Digital gift cards are electronic versions of physical gift cards. They are delivered instantly via email and can be used to make payments online. Some brands, like CleverCards, also allow for these cards to be added to Google Pay or Apple Pay to pay in-store.

Open-Loop Gift Cards

Open-loop gift cards are powered by networks like Mastercard or Visa and can be spent anywhere the network is accepted. These cards give employees maximum flexibility, making them the most popular tax-free gifting choice.

Closed-Loop Gift Cards

Closed-loop gift cards are restricted to a specific retailer or chain. While suitable for targeted gifting, they lack the flexibility that comes with open-loop cards.

How To Give Tax-Free Gift Cards To Employees?

Rewarding employees is an important aspect of building a positive workplace culture, but it often comes with an added tax burden for both employers and staff. This is why Revenue introduced the Small Benefit Exemption Scheme in Ireland

Small Benefit Exemption Scheme Eligibility

From 1 January 2025, employers can provide employees up to five qualifying benefits in a year with a cumulative value not exceeding €1,500. Qualifying tax-free gift allowances are defined as a non-cash voucher or a card that is gifted by an employer to its employee, provided the following conditions are met:

The benefit must not be part of a salary sacrifice arrangement where an employee agrees to forgo a part of their remuneration in exchange for the tax-free gift.

The benefit must be used to purchase goods or services and cannot be exchanged for cash.

Employers can offer up to five qualifying benefits in a year. If more than five qualifying benefits are provided, only the first five benefits are tax-free.

Employers can alternatively also give one qualifying benefit of €1,500 per year. The cumulative value of benefits in both cases must not exceed €1,500, or else the entire amount will be taxable.

Why Gift Cards Are the Best Tax-Free Benefit For Employees?

Flexibility

Tax-free Mastercard gift cards offer employees the flexibility to spend on what matters the most to them. This flexibility ensures the benefits remain relevant for employees.

Instant Gratification

Gift cards can be delivered instantly online via email, making employees feel valued right when they need them. Moreover, gift cards feel more personal and thoughtful than cash bonuses.

Full Value

Gifts that do not qualify under SBE are treated as regular income. Employees who receive a cash bonus have income tax deducted, including PAYE, PRSI and USC. Tax-free gift cards change that and allow employees to receive the full amount being gifted by their employers up to €1,500 tax-free.

Benefits Of Tax-Free Gift Cards For Businesses in Ireland

Prepaid cards are pre-funded, meaning they are ready for use as soon as employees receive them. Businesses can issue and activate business prepaid cards for employees in 3 easy steps:

Reduced Costs

With tax-free gift cards, businesses avoid paying the employer PRSI of 11.15% like in the case of a cash bonus. Hence, it costs the business a lot less since businesses pay exactly the face value of the card and nothing extra.

Better Employee Benefits

Gift cards in general serve as a universal employee benefit proposition and can be built into flexible recognition programs like milestone achievements and work anniversaries. This helps increase the overall employee benefit program.

Higher Engagement

Employees feel more engaged with work when they are recognised on time. Statistics show that employees are 18 times more likely to produce great work if they are recognised for their efforts.

How Tax-Free Gift Cards Work All Year Round?

Tax-free gifts to employees are not just for special occasions or seasonal gifting. Under the Small Benefit Exemption Scheme, employers in Ireland can reward staff at any time of the year as long as the combined value does not exceed €1,500 per year.

Work Anniversaries

Quarterly Project Completion

Performance Recognition

Employee Wellness Contribution

Christmas or New Year Celebrations

This flexibility allows employees to build a year-round employee benefit program rather than a once-a-year gesture. Businesses can design their recognition program at multiple occasions, including:

Give employees €1,500 tax-free with CleverCards.

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