Amid the fanfare of the most recent Budget announcement, there were relatively unheralded changes which deserve a greater focus, particularly in the lead up to Christmas.
Minister for Finance, Paschal Donohoe, announced historic increases in the Small Benefit Scheme in his budget speech.
Dublin-based incentive marketing company Allgo is in a better position than any to highlight the importance of these changes. As AIBF All-Star Incentive Marketing Company of the Year 2022, Allgo designs and implements tailored programmes for businesses to help engage, motivate and reward staff to achieve great results.
So let’s allow their team outline two major enhancements which are both valid from the current 2022 tax year:
- Employers can now give two tax-free rewards in a year up to the threshold, instead of just one.
The one voucher per year rule had been temporarily waived during COVID, but it’s now a permanent enhancement to the scheme.
- Up to now, the Small Benefit Exemption Scheme allowed Irish employers to provide a non-cash tax-exempt benefit to Irish employees of up to €500 once per year. The exemption threshold is now increased from €500 to €1,000 per employee per year.
The increase of €500 in the tax-exempt threshold is the largest increase in the Small Benefit Scheme since it was first introduced in 2004.
Allgo Rewards calculates that the new €1,000 threshold could potentially generate a tax break of over €1 billion to Irish companies and employees. The total tax saving will of course depend on how many employers avail of the scheme, and the new threshold (currently only 62% of Irish employers actually avail of the Scheme).
With up to €1,000 per employee per year in potential benefits without the payment of income tax, PRSI (employer or employee) and USC, the scope for potential tax savings for Ireland’s 2.5m workers and their employers is seen as huge.
Any increase in tax-free rewards is likely to be welcomed by employees in the current cost of living crisis. Allgo Rewards expects that some clients will increase their spend on Allgo MasterCard Gift Cards this year, but more will look to budget for increases next year, and possibly look to introduce two rewards per year from 2023.
In perfect timing, Allgo Rewards has launched two brand new Digital Allgo MasterCard Gift Cards, digital versions of their popular physical MasterCard. The Allgo MasterCard Gift Card is a hugely popular product for companies to reward employees under the Small Benefit Scheme.
Managing Director of Allgo, Gary Purcell, outlined further details about their expanded range:
“The launch of the new Digital Mastercard Gift Cards delivers more choice to clients, especially around ease of sending tax-free gift cards to staff in hybrid and remote working environments. It continues Allgo’s record of innovation, and positions the Allgo Mastercard as the market leader for the Small Benefit Scheme in Ireland.”
With new orders rolling in for the Physical MasterCards and the new Digital MasterCards, Allgo Rewards continues to help companies avail of the increase in the Small Benefit Scheme and save money for both the employer and employee.
Further details on Allgo’s Physical and Digital MasterCard products can be found here.
To learn more about Allgo, visit their All-Star showcase page here.