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Taxation of benefit in kind

  1. Overview
  2. Estimating the value of benefits
  3. Applying tax to benefits
  4. Insufficient wages to deduct tax
  5. Spreading tax over the year
  6. Payment of employee tax by the employer

Applying tax to benefits

For tax purposes, you should treat the value of a benefit as pay. You add this to the employee's pay in the pay period the benefit was given.

Notional pay should be reported either:

  • the day the notional payment is made
  • or
  • the earlier of the next pay day or the 31 December in the year.

Your employee's Income Tax, Pay Related Social Insurance (PRSI) and Universal Social Charge (USC) is calculated on the combined total of pay and benefit value. These must all be deducted from the employee's pay. Employer's PRSI is also due on the combined total of the pay and the benefit value.

You do not need to show the value of a benefit on your employees' payslips. However, you must report the value of a benefit and share based remuneration on your payroll submission to Revenue.

Next: Insufficient wages to deduct tax

Published: 25 April 2023 Print this page

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