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Christmas Bonus

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  • 14-12-2019 12:55am
    #1
    Irishdreamer
    Registered Users Posts: 26 ✭


    Hi,

    Just wondering if anyone can help with a Christmas Bonus question.

    I have looked up various websites about Christmas Bonuses and the small benefits reliefs. The information seems to vary.

    My question is if someone gets a Christmas Bonus of €700 and gets this bonus as a gift card of €500 and the remaining €200 is added to their wages for a week, is only the €200 taxable?

    Apologies if this seems like a stupid question.
    Tagged:


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    #2
    Septic tank
    Registered Users Posts: 23 ✭Septic tank


    Irishdreamer wrote: »
    Hi,

    Just wondering if anyone can help with a Christmas Bonus question.

    I have looked up various websites about Christmas Bonuses and the small benefits reliefs. The information seems to vary.

    My question is if someone gets a Christmas Bonus of €700 and gets this bonus as a gift card of €500 and the remaining €200 is added to their wages for a week, is only the €200 taxable?

    Apologies if this seems like a stupid question.

    Only the €200 will be taxed. Employers can gift one 4 all’s etc tax free up to a value of €500 in any one year.


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    #3
    qxtasybe1nwfh2
    Closed Accounts Posts: 447 ✭✭qxtasybe1nwfh2


    Irishdreamer wrote: »
    Hi,

    Just wondering if anyone can help with a Christmas Bonus question.

    I have looked up various websites about Christmas Bonuses and the small benefits reliefs. The information seems to vary.

    My question is if someone gets a Christmas Bonus of €700 and gets this bonus as a gift card of €500 and the remaining €200 is added to their wages for a week, is only the €200 taxable?

    Apologies if this seems like a stupid question.

    Yes this is correct. 500 euro voucher is the max you can get tax free.


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    #4
    Masala
    Registered Users Posts: 3,462 ✭✭✭Masala


    Irishdreamer wrote: »
    Hi,

    Just wondering if anyone can help with a Christmas Bonus question.

    I have looked up various websites about Christmas Bonuses and the small benefits reliefs. The information seems to vary.

    My question is if someone gets a Christmas Bonus of €700 and gets this bonus as a gift card of €500 and the remaining €200 is added to their wages for a week, is only the €200 taxable?

    Apologies if this seems like a stupid question.

    ... in my limited experience ... i would say your understanding is correct


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    #5
    retalivity
    Registered Users Posts: 14,056 ✭✭✭✭retalivity


    The small gifts benefit allows one tx-free amount up to €500 per year on a gift card. So it sounds like yes, only the 200 would be taxed, but i guess it would come down to how your employer has termed the bonus in your contract - can you take the 700 as cash and take the tax hit if you dont want a gift card?


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    #6
    Irishdreamer
    Registered Users Posts: 26 ✭Irishdreamer


    retalivity wrote: »
    The small gifts benefit allows one tx-free amount up to €500 per year on a gift card. So it sounds like yes, only the 200 would be taxed, but i guess it would come down to how your employer has termed the bonus in your contract - can you take the 700 as cash and take the tax hit if you dont want a gift card?

    There is actually no mention of a bonus in the contracts. This is the first time the staff have been offered a bonus of either a gift card or cash (through payroll). The gift card is an excellent option so it was agreed with the staff to use this option. However one staff member is getting a higher bonus but still wanted the €500 gift card and it was our understanding that only the amount excess of the gift card, €200, would be taxable through the payroll system.

    I read on a couple of websites that it works differently. For example one website stated "Where a bonus exceeds the €500 limit, the full value is subject to tax".

    I'm just worried that we have done this incorrectly.


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    #7
    Masala
    Registered Users Posts: 3,462 ✭✭✭Masala


    Irishdreamer wrote: »
    There is actually no mention of a bonus in the contracts. This is the first time the staff have been offered a bonus of either a gift card or cash (through payroll). The gift card is an excellent option so it was agreed with the staff to use this option. However one staff member is getting a higher bonus but still wanted the €500 gift card and it was our understanding that only the amount excess of the gift card, €200, would be taxable through the payroll system.

    I read on a couple of websites that it works differently. For example one website stated "Where a bonus exceeds the €500 limit, the full value is subject to tax".

    I'm just worried that we have done this incorrectly.

    Ya ... if you get a gift card for €700 - then the whole thing is taxable. but your question of getting 2 elements - one a gift card of €500 and then €200 into his wages is what we are addressing


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    #8
    cefh17
    Registered Users Posts: 990 ✭✭✭cefh17


    retalivity wrote: »
    The small gifts benefit allows one tx-free amount up to €500 per year on a gift card. So it sounds like yes, only the 200 would be taxed, but i guess it would come down to how your employer has termed the bonus in your contract - can you take the 700 as cash and take the tax hit if you dont want a gift card?

    Always take the oneforall, for a fee of €8 you can have the balance transferred in full to (I believe) a bank acc


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    #9
    Irishdreamer
    Registered Users Posts: 26 ✭Irishdreamer


    Masala wrote: »
    Ya ... if you get a gift card for €700 - then the whole thing is taxable. but your question of getting 2 elements - one a gift card of €500 and then €200 into his wages is what we are addressing

    Thanks for the replies!

    As you can tell I'm not familiar with this and apparently neither is the company I work for as this is the first year we are doing it.

    Seeing various different information online is confusing.
    For example another website said "If the €500 value is exceed in any year then the total benefit is liable for tax. There is no exemption for the first €500."
    I could be wrong in my understanding of that piece though.


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    #10
    retalivity
    Registered Users Posts: 14,056 ✭✭✭✭retalivity


    cefh17 wrote: »
    Always take the oneforall, for a fee of €8 you can have the balance transferred in full to (I believe) a bank acc

    Super valu and tesco accept them, so can be used for groceries and every day living. Actually, i used my last one in a few pubs around dublin to buy a round of drinks, so no need really to transfer to a bank acc and get the cash!


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    #11
    Calahonda52
    Registered Users Posts: 12,222 ✭✭✭✭Calahonda52


    Was in Woodies earlier and they refused to accept it, told me that a wide number of retailers have installed new systems which wont accept them
    I see this as blowback against the use of such cards

    “I can’t pay my staff or mortgage with instagram likes”.



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    #12
    WacoKid
    Registered Users Posts: 433 ✭✭WacoKid


    The gift card for €500 has to be in one go. You cannot give the small benefit relief in multiple gifts (i.e. €250 then €250). If you do then only the first gift is tax-free.


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    #13
    Wuff Wuff
    Closed Accounts Posts: 1,429 ✭✭✭Wuff Wuff


    cefh17 wrote: »
    Always take the oneforall, for a fee of €8 you can have the balance transferred in full to (I believe) a bank acc

    can have it transferred for free if you know do the paypal workaround


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