The publication of the Finance Bill last week brought a few new measures which had not been announced in the Budget speech.

One of those particularly welcomed by contractors and small business owners is the increase of the Small Benefits Exemption, from an annual amount of €250 to €500 with effect from 1 January 2016.

Fenero have always been very proactive in highlighting the Small Benefits Exemption to our clients. We even provide a free of charge administrative service to enable our umbrella company contractors to avail of the scheme.

The rules and benefits of availing of the Small Benefits Exemption scheme can be found in one of our previous blog posts, recently updated, at: https://www.fenero.ie/e500-tax-free-bonus-anyone/

In essence the scheme is a way to extract a tax free payment of up to €500 from your company each year.

For small business owners, using this scheme is a great way to pay bonuses to your employees. Employees avoid PAYE, PRSI and USC, which makes the bonus much greater value to them, and employers avoid the Employers PRSI costs which would be associated with otherwise paying the €500 as a salary bonus.

If you haven’t yet availed of the Small Benefits Exemption Scheme for 2015, make sure you do to get the benefit of €250 tax free. And don’t forget to do so again in 2016 when the tax free amount increases to €500.

If you have any questions about this article or your own situation, add your comments below and we will get back to you!

 

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