Currently, employees in the private sector can receive a bonus of €500 tax-free from their employers each year. Anything above this amount is subject to tax.
Some good news is on the way as Minister for Finance, Paschal Donohoe is drafting a proposal to increase this to €1,000. The bonus must be given in the form of vouches or cards that can be used for goods or services and cannot be given as cash.
The proposal is one of the ways the Government is looking at to help workers have more money after tax.
Tánaiste Leo Varadkar, who broke the news, highlighted the €1,000 Covid bonus that was given to public sector workers, which was tax free, and noted that it would be unfair if private sector workers could not avail of the same if their employers wanted to pay them bonuses.