Benefit In Kind Changes

The Finance Act 2011 abolishes the Benefit-in-kind exemption whereby professional fees and subscriptions were paid by employers on behalf of employees. Employees will now be assessed to income tax, universal social charge and PRSI on the amount paid on their behalf and employers will also have to pay employers’ PRSI at a rate of 10.75%.

Similarly, the provision of childcare facilities by an employer on behalf of employees no longer qualifies for the Benefit In Kind exemption and will be assessed to tax as above.

The amount of Benefit-in-kind in relation to preferential loans to employees will only be reduced by taking into account the interest actually paid by employees and not the interest payable by way of a loan arrangement. The balance will be the amount assessed to income tax, universal social charge and PRSI while the employer will pay Employers PRSI.

For further information please contact OSK Tax.

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