Service and performance schemes and awards

Staff suggestion schemes

You may decide to run a staff suggestion scheme. Any awards you give your employees under the scheme are generally taxable benefits in kind. Your employee is chargeable on the benefit under the Pay As You Earn (PAYE) system to: 

However, you can give the award tax free if it meets the conditions of the Small Benefit Exemption.

Long service awards

You may decide to make a long service award to your employee. This award is not a taxable benefit in kind, where all of these conditions are met:

  • the award is made to mark long service (must be 20 years or more)
  • the award is a tangible item (that is, not vouchers, bonds or cash)
  • the award cost is €50 or less for each year of service
  • and
  • no similar award has been given to your employee within the last five years.

If these conditions are not met, your employee is chargeable on the benefit under the Pay As You Earn (PAYE) system to: 

However, you can give the award tax free if it meets the conditions of the Small Benefit Exemption.

Exceptional performance awards

You may pay an exceptional performance award to your employee. This award is a generally taxable benefit in kind. Your employee is chargeable on the benefit under the Pay As You Earn (PAYE) system to:

However, you can give the award tax free if it meets the conditions of the Small Benefit Exemption.

If an award does not meet the conditions of the Small Benefit Exemption the award must be grossed up. This will ensure your employee receives the full benefit of the award. For more information on grossing up please see Taxation of benefits.