Dáil Éireann Debate, Thursday - 4 July 2024
199. Deputy Brian Stanley asked the Minister for Finance if an employer has to facilitate the tax rebate scheme for those who purchase yearly tickets for commuting to work; and in cases in which the employer refuses to facilitate this, the options that are open to the employee. [28932/24]
View answerI understand that this Parliamentary Question relates to a situation where an individual is unable to avail of the Taxsaver scheme as their employer does not participate in the scheme and that the Deputy wishes to know whether the individual can avail of the scheme by another method.
Section 118(5A) of the Taxes Consolidation Act 1997 (TCA) provides an exemption from benefit-in-kind (BIK) where an employer purchases a travel pass for an employee. This is commonly known as the Taxsaver scheme.
Under section 118B TCA, an employer and employee may also enter into a Revenue-approved salary sacrifice arrangement under which the employee agrees to sacrifice part of his or her salary, in exchange for the relevant benefit.
It is important to note that employers are not required to take part in the TaxSaver scheme. Where an individual's employer does not participate in the schemes, any benefits that could arise under the relevant scheme will not be available to any employees of that employer.
This means that an individual cannot avail of the scheme if their employer has chosen not to participate. However, it may be worth highlighting to their employer that if they do decide to participate in the scheme, employer’s PRSI is not payable on the cost of the relevant benefit(s) when they make the associated deduction from their employees' salary payments.
Further details on the tax treatment applicable to the provision of a travel pass to an employee and in regard to salary sacrifice arrangements can be found on Revenue’s website and in Tax and Duty Manuals Part 05-01-01f and Part 05-01-01k, respectively, which may be accessed at the following links:
• Revenue website - www.revenue.ie/en/employing-people/benefit-in-kind-for-employers/travel-passes-and-air-miles/index.aspx
• Tax and Duty Manual Part 05-01-01f - www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-01-01f.pdf
• Tax and Duty Manual Part 05-01-01k – www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-01-01k.pdf.
