Tax-Free Vouchers for Employees in Ireland: What You Can (and Can't) Give

What makes a voucher tax-free in Ireland

The rule sits in section 112B of the Taxes Consolidation Act 1997. Revenue calls the thing you hand over a relevant incentive, and it qualifies for the Small Benefit Exemption only when it clears three conditions.

It has to be a voucher or a tangible benefit rather than cash. Revenue's definition of a benefit is short: a tangible asset other than cash. A shopping voucher qualifies. A hamper qualifies. A bank transfer does not, and neither does a cheque.

It cannot be redeemable for cash, in full or in part. This is the condition that catches out the most employers, because it rules out cards that look like gift cards but behave like money. Revenue's own worked example covers a €400 gift card that can be used in store, used online, or inserted into a cash machine to withdraw cash. It fails, and it fails even if the employee never goes near an ATM.

It cannot be part of a salary sacrifice arrangement. Where an employee gives up pay they were entitled to and receives a voucher instead, the voucher is taxable. Revenue extends that to settlements: in one published example, a €500 voucher offered to settle a Workplace Relations Commission claim over unpaid salary was treated as salary sacrifice and taxed in full.

Clear all three and the benefit reaches the employee with no Income Tax, USC or PRSI on either side. Miss one and the full cost goes through payroll as notional pay.

The five-benefit, €1,500 rule and the order it applies in

Since 1 January 2025 the exemption has covered up to five benefits per employee per tax year, with a combined value that cannot exceed €1,500. Budget 2026 left both figures alone, so the same numbers apply for the 2026 tax year. Finance Act 2024 also wrote an end date into the legislation: as things stand the exemption runs to the end of the 2029 tax year.

The order matters more than most employers expect. Revenue applies the test cumulatively to the first, second, third, fourth and fifth benefit given in the year, checking the running total against €1,500 each time. You do not get to choose which five to exempt. An employer cannot deliberately tax a small January voucher in order to free up allowance for a larger one in December.

Here is Revenue's own worked example, with the sixth-benefit rule added at the end:

Two things follow from that. The Easter egg and the meal both count, so gestures that never touched a gift card still use up slots. And a sixth benefit is taxable even when the running total is nowhere near the cap: in Revenue's example of six €200 vouchers, the first five are exempt and the sixth is taxed despite a year-end total of only €1,200.

One further limit is easy to get wrong. A single benefit of more than €1,500 is taxable in full, not just on the excess. A €1,600 card creates a €1,600 charge.

What counts, and what quietly uses up a slot

Vouchers and multi-brand gift cards

A voucher's face value is generally the value of the benefit, so a €500 gift card is a €500 benefit. Minor fees or postage you pay when buying the vouchers are not added to that face value when you test it against the €1,500 threshold. Note the sting in the tail: if the benefit fails the exemption for any other reason, those costs get pulled back into the taxable value.

Things that are not vouchers at all

A hamper, an Easter egg, a bottle of something decent, a piece of crystal: all tangible assets other than cash, so all relevant incentives. Revenue's examples also count a celebratory team meal at €150 a head as one of an employee's five. If your reward calendar runs to a summer thank-you, a Christmas dinner and a Christmas gift card, you may be closer to the five-benefit ceiling than payroll records suggest.

Long service awards

A separate Revenue practice applies here. A tangible article given for long service escapes a tax charge where the cost to the employer is no more than €50 for each year of service, the service period is at least 20 years, and no similar award has gone to the same person in the previous five years. It covers tangible items only: Revenue's manual says the practice does not apply to cash or vouchers, so a gift card for long service has to qualify under the Small Benefit Exemption instead. Meet all three and the award sits outside the five. Miss any one of them and it becomes a relevant incentive like anything else, which changes what is left in that employee's allowance.

Cards that behave like cash

Prepaid cards that work at an ATM, or that can be cashed out in part, fail the non-cash test. So does anything an employee can convert back to money at the till. If you are unsure about a specific product, the question to put to the provider is narrow: can any part of this balance be turned into cash?

Where employers get tax-free vouchers wrong

• Reporting after the fact: under Enhanced Reporting Requirements the date and value of every exempt benefit must reach Revenue through ROS on or before the date you provide it. Not at year end, and not in the next payroll run.
• Treating the allowance as a pot that rolls over: it does not. Give €800 in 2026 and 2027 starts at €1,500, not €2,300.
• Losing count across the business: the five-benefit limit is per employee per tax year, not per budget holder. A gift from a team lead in June and another from the company in December are the first and second benefits, whoever paid for them.
• Ordering too late in December: a benefit provided in December belongs in December's reporting and payroll period. Cards that only reach people in the first week of January land in the new tax year and start a fresh count, which is either a problem or an opportunity depending on what you intended.
• Running it through payroll as a bonus line: once it is processed as ordinary pay it is taxed as pay, and the exemption never gets a chance to apply.

OptionsCard was designed to sit inside these rules. It is a digital gift card the recipient swaps for retailer gift cards from a catalogue of over 70 Irish and international brands, so the value can only reach goods and services and no part of the balance can be taken as cash. There are no fees, the card is valid for five years, and businesses can order up to €25,000 online by invoice.

Figures here are correct as at August 2026. Tax treatment shifts with each Budget, so confirm the current position with your accountant before a large rollout.

Ready to give tax-free vouchers without creating a payroll problem?

Sign up at app.optionscard.ie/register and order online in a few minutes. If you would rather check the detail against your own setup first, email us at sales@optionscard.ie.