This is the rule behind the Christmas voucher, and it is far more generous than most employees — and a surprising number of employers — realise. Five benefits, not one, and a combined limit of €1,500.
The traps are all-or-nothing, so they are worth knowing before December.
Quick facts
- Limit
- €1,500 combined, per year
- How many
- Up to five benefits
- Since
- 1 January 2025
- Must not be
- Cash, or redeemable for cash in whole or in part
- Carry over?
- No — unused allowance cannot be carried over
- Employer must
- Report the date paid and value to Revenue
The rule
"From 1 January 2025, you can give employees up to five small benefits, tax-free, each year. These benefits must not be in cash and the combined value of the five benefits cannot exceed €1,500. If more than five benefits are given in a year, only the first five benefits may qualify for the tax exemption. Unused allowance amounts cannot be carried over."
Note the ordering rule: it is the first five that qualify, not the five you would have chosen. If four small benefits are given early in the year, a large one in December may be the sixth and fall outside the exemption entirely.
The single-benefit trap
"A single benefit of up to €1,500 may be provided to an employee tax-free. If a single benefit exceeds €1,500 in value, the full value of that benefit is subject to tax. Where up to five benefits are provided, the combined value of those benefits cannot exceed €1,500."
Read that middle sentence carefully. A single voucher over the limit is not part tax-free and part taxed — the full value becomes taxable. Crossing the line by a small amount costs far more than the amount itself.
Anything cashable is out
"To qualify for tax-free treatment, the vouchers or benefits must be of a type that can be used only to purchase goods or services. Where they can be redeemed in full or in part for cash, they do not qualify for the small benefit exemption."
In full or in part. A voucher that gives change in cash, or that can be partly cashed out, fails the test — and it fails for the whole benefit.
On the value used: "The face value of a voucher is generally the value of the benefit. However, you may incur minor fees or postage charges when purchasing vouchers for your employees. Revenue will not consider such nominal costs in the context of the small benefit exemption threshold." So a small handling fee does not eat into the €1,500.
It has to be reported
"You must report details of the date paid and value of this benefit to Revenue."
That is on the employer, under enhanced reporting requirements. For an employee it is worth knowing simply because it means these benefits are visible to Revenue — the exemption is a proper relief, not something informal.
Common questions
How much can my employer give me tax-free?
Up to €1,500 a year in combined value, across up to five non-cash benefits. That has been the position since 1 January 2025.
Can it be one big voucher?
Yes. A single benefit of up to €1,500 may be provided tax-free. But if a single benefit exceeds €1,500, the full value of that benefit becomes taxable — not just the excess.
What if I get a sixth benefit?
Only the first five benefits in a year may qualify for the exemption, so a sixth falls outside it regardless of value.
Do cash or cashable vouchers count?
No. The benefits must not be in cash, and vouchers that can be redeemed in full or in part for cash do not qualify for the small benefit exemption.
Can unused allowance be carried into next year?
No. Unused allowance amounts cannot be carried over.
Does a voucher handling fee use up the limit?
No. Revenue will not consider minor fees or postage charges incurred when purchasing vouchers in the context of the threshold, though they must be included if the exemption's conditions are not met.