Valuation of benefits

Goods and assets provided to employees

You may purchase or provide goods and assets for an employee such as: 

  • televisions
  • computers
  • mobile phones
  • electronics
  • appliances
  • cars
  • houses
  • boats.

The tax treatment of these items depends on whether you:

  • transfer ownership of the item to your employee
  • keep ownership of the item.

Employer transfers ownership of good or asset

The value of this benefit is the higher of:

  • the cost you incurred in providing the good or asset
  • the market value of the good or asset (the amount your employee would get if they sold the item).

You must deduct Pay As You Earn (PAYE)Pay Related Social Insurance (PRSI) and Universal Social Charge (USC) on this value.

If you manufacture the goods, the cost of providing the goods is normally lower than the market value. The higher of these two amounts is the value of the benefit. 

You may choose to give your employee with an asset which has depreciated in value. Where this occurs the value of the benefit is the market value of the asset on the date of the gift. 

Employer keeps ownership of good or asset

You may keep ownership of the good or asset and provide it for private use by an employee.

The taxable benefit is 5% of the market value of the good or asset when you first provided it as a benefit. The same charge applies then each year the employee uses the good or asset. If you give the same good or asset to another employee, the taxable benefit is not recalculated.

Where your employee has free use of an asset for part of the year only, the taxable benefit should be time-apportioned.

You must operate PAYE, PRSI and USC on the taxable benefit.

Note

Different rules apply where you let an employee use accommodation, company cars or vans owned by you. (Motorcycles weighing more than 410kg are cars for BIK purposes).

Expenses paid by the employer to maintain a good or asset are also considered a taxable benefit. 

 

Staff discounts

You may offer your staff a discount on goods provided by your business. If you do, a taxable benefit may not arise if certain conditions are met. For more information on this see Staff discounts.

Goods provided for work purposes

You may provide your employees with certain office equipment for business purposes. This is not a taxable benefit where certain conditions are met. For more information on this see Internet, computers, phones and work related supplies.

Next: Specific valuation rules