Small Benefit Exemption Scheme – What It Is and How You Can Be Eligible

What is the Small Benefit Exemption Scheme?

The Small Benefit Exemption Scheme enables contractors in Ireland to receive non-cash benefits without incurring tax liabilities. This scheme serves as a tax-efficient way to reward yourself or your employees in 2025! Purchases under the scheme are tax-free and exempt from PAYE, USC, and PRSI, making it an attractive option for contractors seeking to maximise their income efficiently.

The current limits were introduced in Budget 2025 and took effect from 1 January 2025. Budget 2027, announced on 6 October 2026, left them unchanged, so the same rules apply for the whole of 2026 and into 2027.

Small Benefit Exemption rules for 2026:

The limit is €1,500 per employee per tax year, which can be taken as one benefit or split across up to five. To qualify:

• The benefit must be non-cash. Gift cards and vouchers qualify as long as they cannot be redeemed, in full or in part, for cash.
• The combined value of all benefits in the year cannot exceed €1,500. Only the first five benefits in a year can qualify.
• If a single benefit exceeds €1,500, or the running total goes over €1,500, the whole of that benefit is taxable, not just the excess.
• Unused allowance cannot be carried forward. Anything not used by 31 December 2026 is lost.

A single €1,500 gift card remains the most common way contractors use the scheme.

Where can contractors purchase a tax-free gift card?

Icon Accounting partners with two leading Irish gift card providers, Me2You and Clevercard, so that Icon Accounting contractors can avail of the Small Benefit Exemption Scheme with minimal hassle. Both are accepted in thousands of retailers nationwide and online, and neither can be exchanged for cash, which keeps them within the rules of the scheme.

If you would like to claim a Me2You or Clevercard gift card, the best approach is to speak with your dedicated Icon account manager. They will confirm your eligibility, run through the process with you step by step, and make sure the cost is processed through your company so the exemption is applied correctly and reported to Revenue.

If you prefer alternative options, such as the One4all voucher, please ensure that the receipt is issued in your Company Name. Your Payroll Account Manager will then process it as a business expense through your payroll once you provide the receipt.

How much tax can a contractor save with the Small Benefit Exemption?

Purchasing a gift card personally would cost you the full amount, €1,500. However, by purchasing the gift card through the Small Benefit Exemption Scheme with Icon Accounting, you will benefit from tax relief. As the purchase is exempt from Income Tax, USC (Universal Social Charge), and PRSI, the actual cost of the gift card reduces significantly to just €780.

How Often Can I Avail of the Small Benefit Exemption Scheme?

The exemption applies once per tax year, running 1 January to 31 December. You can use the full €1,500 in a single gift card, or spread it over up to five smaller gift cards during the year, provided the total stays at or under €1,500.

Most contractors order one card towards the end of the year, and Christmas is the busiest time, so we recommend placing your order in now to make sure it is processed with an outstanding invoice to be paid. 

A new €1,500 allowance becomes available on 1 January 2027.

Is There a Deadline for Purchasing the Gift Card?

No, there is no deadline for ordering gift cards. You can purchase them at any time throughout the year. However, you must have an outstanding invoice waiting to be paid in order for the gift card to be purchased and processed through your payroll.

Got a Question?

For more information about the Small Benefit Exemption Scheme or assistance with purchasing a gift card, contact your Payroll Account Manager at Icon Accounting on 01-8077106 or email [email protected]. We’ll be happy to help!