Everything you need to know about the Small Benefit Exemption Scheme

What is the Small Benefit Exemption Scheme?

Under the Revenue Commissioner’s Small Benefit Exemption Scheme, Contractors are entitled to a non-cash bonus of up to €500 each year. The cost of the purchase is on a tax-free basis and will be exempt from PAYE, USC and PRSI.

Where can I purchase a gift voucher?

Icon Accounting and Me2You have teamed up so that Icon Accounting Contractors can easily avail of the Small Benefit Exemption Scheme. Gift cards can be purchased via their portal – https://icon.me2you.ie/

If you choose to go elsewhere, i.e. One4all voucher, PC World etc., please ensure that the receipt is made out to the Umbrella Company when you purchase it. Your Payroll account manager would then process it as a business expense through your payroll once the receipt has been provided in your Umbrella company name.

Why would I purchase a Me2You Gift Card via Icon Accounting?

If you were to purchase a gift card personally, it would cost you €500. However, if you purchase the gift card through the Small Benefit Exemption Scheme with Icon Accounting, you will automatically receive tax relief on the purchase as it is exempt from Income Tax, USC (Universal Social Charge) and PRSI. This will mean the actual cost of the gift card will only be €250.

How often can I avail of the Small Benefit Exemption Scheme?

Usually, only one such benefit can be given in one tax year, even if you do not take the full €500. For example, you cannot purchase a voucher of €300 earlier in the year and purchase a further €200 later in the year. 

However, Revenue announced that for the tax year 2020, the single gift rule does not apply.  Therefore, you can make mulitple purchases in one year up to the value of €500. 

This exception is in response to the Covid-19 outbreak to allow staff members working through the crisis to be rewarded. 

Is there a deadline for purchasing a Me2You Gift Card?

No – there is no deadline for ordering the gift cards and are available to purchase whenever you wish throughout the year.

How will the deduction be displayed on my payslip?

The total cost of the gift card, €500, will be presented as a deduction on your payslip. However, you will automatically receive the tax relief on this cost.

Where Can I spend my Me2You Gift Voucher?

You can spend your Me2You Gift Cards in thousands of retailers and online stores. To find out more, please visit the Me2You website.

For more information, please contact your Payroll Account Manager at Icon Accounting on 01-8077106 or via email info@iconaccounting.ie and we will be happy to help!