Benefit in Kind in Ireland: What Employers Need to Report to Revenue

If you give an employee something of value that is not cash, Revenue generally treats it as a benefit in kind (BIK), and Revenue's pages say employers must deduct income tax, PRSI and USC on the value of a taxable benefit through PAYE. This guide explains what Revenue says about benefit in kind employers Ireland-wide must do: what counts, how the tax is applied, how benefits are valued, and what has to be reported and when. Page dates are given throughout because Revenue updates these pages regularly. It is also worth reading our guide to the written statement of terms of employment alongside this one.

What counts as a benefit in kind

Revenue's page "What is benefit in kind (BIK)?" (published 12 May 2026) says that, generally, a BIK "refers to a non-cash benefit of monetary value that you provide for your employee". It adds that these benefits are also called notional pay, fringe benefits or perks, and because they have value they must be treated as taxable income.

The page makes several points about who is taxed:

• An employee whose total income, including benefits, exceeds €1,905 in a year must pay tax on their benefits. Income from a previous job does not count towards that limit.
• Where an employee works for several businesses under one parent company, the combined income from those jobs is measured against the same limit.
• If a benefit is given to an employee's spouse or civil partner, family members, dependants or guests, the employee pays the tax on it.
• A company director must pay tax on any BIK, regardless of total income.

Revenue's BIK index (last updated 10 September 2026) lists many categories, including private use of employer-provided cars and vans, travel passes and air miles, free or subsidised accommodation, free use of assets, use of facilities, internet, computers and phones, examinations and courses, service and performance schemes, corporate charge cards, food and entertainment, preferential loans, third-party benefits, medical insurance and check-ups, staff discounts, pension contributions and company shares. This article looks at the general rules and a few common examples. Revenue has a separate page for each category, and you should read the relevant one before deciding how to treat a benefit.

How the tax is applied through payroll

According to Revenue's page "Applying tax to benefits" (published 23 September 2026), the employer should treat the value of a benefit as notional pay. The notional pay goes into the pay period in which the benefit is given, alongside the employee's ordinary pay. Income tax, PRSI and USC are calculated on the combined total of pay and notional pay, and all of these taxes must be deducted from the employee's pay. Employer's PRSI is also due on the combined total of the pay and the benefit value.

Our reading is that a benefit can leave an employee with a lower net payment in the period it is provided, even though no cash was handed over. This is our suggestion, not a Revenue requirement: tell employees when a taxable benefit is introduced.

Valuing the benefit

Revenue's page "Estimating the value of benefits" (published 23 September 2026) says that where the value is known, the employer must calculate tax on the actual value. Where it is not known, the employer should estimate it. The page describes this as the best estimate "from a common sense point of view", to be included in the relevant payroll submission. When the actual value becomes available, the employer must include any adjustment in the next payroll submission.

The page also notes that some benefits have special valuation rules, including private use of company cars and vans, free or subsidised accommodation, free use of assets, preferential loans and third-party benefits. For company cars, Revenue's page "How to calculate the taxable benefit" (published 19 January 2026) explains that the taxable amount depends on the car's original market value, annual business kilometres and CO2 emissions band, and can be reduced by employee contributions. The percentages and reductions on that page change over time, so we have not repeated them here. Use the current page when you calculate.

What employers must report, and when

Revenue's page on benefit in kind under payments to employees (published 12 January 2026) sets out the reporting rules in practice:

• Timing: notional pay should be reported on or before making a notional payment. The "Applying tax to benefits" page likewise says notional pay must be reported to Revenue on or before the day the notional payment is made.
• Estimates: if the actual value is not available, the employer must submit a best estimate in the relevant payroll submission, and include any adjustment in the next submission.
• Review: the page says to review notional pay regularly, at least quarterly.
• Share-based remuneration: without a precise valuation, report a best estimate as notional pay and adjust later.
• Expenses: make a payroll submission on or before any payment to an employee, and file a separate payroll submission for a reimbursement of taxable expenses.

Revenue also has Enhanced Reporting Requirements (ERR). Its page on submitting ERR details (published 22 January 2026) explains how to submit expenses or benefits through ROS, by file upload or online form, and asks employers to make sure their software provider is aware of the requirement. That page does not list which payments must be reported, so check Revenue's ERR guidance for the full scope.

The small benefit exemption

Revenue's page on the small benefit exemption (published 1 January 2025) says that from 1 January 2025 employers can give an employee up to five small benefits tax-free each year, with a combined value not exceeding €1,500. Key conditions from the page:

• The benefits must not be in cash.
• Vouchers must be of a type that can be used only to purchase goods or services. Vouchers redeemable for cash, in full or in part, do not qualify.
• Only the first five benefits in a year can qualify, and unused allowance cannot be carried over.
• A single benefit over €1,500 is fully taxable.
• The employer must report the date paid and the value of the benefit to Revenue.

Common examples, as Revenue describes them

Medical insurance and check-ups

The page on medical insurance plans and check-ups (published 18 September 2026) says employer-paid medical insurance premiums are a BIK, with income tax, PRSI and USC due on the gross premium. It also says employers may pay for one medical check-up per year per employee without a taxable benefit where the check-up is available to all employees and is a qualifying type.

Staff discounts

The staff discounts page (published 4 August 2026) says a discount is not a taxable BIK where the employee pays an amount at least equal to the employer's costs of providing the item and the item cannot easily be turned into money. It lists three taxable situations: a price below the employer's cost, goods that are easily resold, and in-house vouchers or discount notes.

Service and performance awards

The page on service and performance schemes and awards (published 4 August 2026) says suggestion scheme awards, examination awards and exceptional performance awards are generally taxable, though the small benefit exemption may apply. A long service award is not taxable only if all the page's conditions are met, including a tangible item, 20 years or more of service, a cost within the page's per-year limit, and no similar award in the last five years.

A practical approach for Dublin employers

These are our suggestions rather than legal requirements:

• Keep a benefits register listing each benefit, who receives it, the basis of valuation and the payroll date it was reported.
• Agree with payroll who tells them about new benefits, such as a gym membership or a voucher scheme, before they are provided.
• Diarise the quarterly review of notional pay that Revenue asks for.
• If you offer a workplace pension or an auto-enrolment arrangement, remember that Revenue lists pension contributions as a separate BIK topic. We have not covered their tax treatment here, so see Revenue's page and our guide to auto-enrolment and MyFutureFund contributions for the scheme side.

Learnsignal's offices are off Baggot Street in Dublin, and we offer in-person training from there. For current details, see our CPD pages.

Frequently asked questions

What is a benefit in kind?

Revenue says that, generally, it is a non-cash benefit of monetary value that an employer provides for an employee. It is treated as taxable income and processed as notional pay.

Which taxes apply to a BIK?

Revenue says income tax, PRSI and USC are calculated on pay plus notional pay and deducted from the employee's pay. Employer's PRSI is also due on the combined total.

When must a BIK be reported?

Revenue says notional pay should be reported on or before the day the notional payment is made, through the payroll submission. Estimates are adjusted in the next submission once the actual value is known.

Is there a tax-free allowance for small gifts?

Revenue's small benefit exemption allows up to five tax-free benefits a year, with a combined value not exceeding €1,500, from 1 January 2025, subject to conditions such as no cash and no cash-redeemable vouchers.

Where can I check the latest rules?

Use the benefit in kind pages for employers on revenue.ie, and check each page's date, since figures and treatments are updated.

Treat BIK as a payroll process rather than an annual clean-up: classify, value, report and review as each benefit is provided.