What pay includes

Expenses and travel

Payments towards the cost of travelling

If you make payments to your employees for non-business journeys, this is generally taxed as pay. Travel to and from work is considered a non-business journey.

If your employee has a company car, and you make payments towards the car running costs, the costs:

If you make payments for business travel, this will generally not be taxed as pay. The payment must be made in line with the guidelines set out in Travel and subsistence.

Payment of taxi fares

Where you pay taxi fares for your employees, this is generally taxed as pay. If the taxi is shared by more than one employee, the taxable amount should be split equally.

Taxi fares paid by you are not taxable pay where either of the following apply:

1. Provision of taxi transport on an irregular basis

  • your employee has to work between 22.00 and 06.00
  • the taxi transport is provided to ensure the safety of the employee
  • the taxi is paid from work to home only
  • and
  • they are provided irregularly (no more than 60 journeys per year).

The exemption does not apply to individuals who work late as part of their normal working pattern.

Revenue introduced a concessionary measure due to the COVID-19 pandemic. Details of this can be found in payment of taxi fares in the Benefit-in-kind (BIK) changes during COVID-19 restrictions section.

2. Provision of taxi transport for a disabled employee

Taxi fares paid by you are not taxable pay if your employee has:

  • a disability that has a significant and long-term effect on the employee’s ability to carry out normal day to day activities
  • or
  • difficulty using public transport.

This applies for journeys both to and from work. Additionally, where a staff member is unwell and is sent home in a taxi, this is not taxable pay.

Payment of travel pass

If you have provided your employee with a travel pass, see Travel passes or air miles for more information.

Provision of a bus service

If you provide a bus service to transport your employees to and from work, it will not be taxed as pay if the service is:

  • available to employees whether they use it or not
  • for journeys between home and work
  • or
  • for journeys between workplaces.

Other amounts

You can make other payments to your employees such as:

  • round sum expense payments to your employees and directors
  • or
  • tips, including credit card tips, received from customers.

You must treat these payments as pay, and tax them in the normal way.

If your employees receive tips directly from customers, they must declare this income on their tax returns.

Next: Lump sum payments