Flat Rate (employment) expenses
These are expenses that are incurred in the performance of the duties of the employment and are directly related to the 'nature of the employee's employment'. A standard flat rate expenses allowance (deduction) is set for various classes of employee. For example, airline cabin crews are granted flat rate expenses of €64 per annum. The amount of the deduction is agreed between Revenue and representatives of groups or classes of employees (usually the employees are represented by trade union officials). The agreed deduction is then applied to all employees of the class or group in question.
Round sum expenses
Round-sum expenses payments (lump sum expenses payments) whether paid weekly, monthly, yearly or otherwise, which are paid to the employee to cover expenses, must be treated as pay and taxed accordingly. An example of a round sum payment is where an employer agrees to pay, say €300 per month in addition to basic salary in order to cover expenses. This €300 must be treated as pay and taxed accordingly.
Meal allowances
Employers are reminded that round-sum meal expenses payments are taxable in full and must be treated as pay. Please see earlier paragraph 'Round-Sum Expenses'.
Meal Vouchers
Where an employer provides luncheon or meal vouchers to employees there is a taxable benefit and the face value of the vouchers (disregarding 19c per voucher) must be treated as pay and taxed accordingly
Canteen Meals
A taxable benefit does not arise in respect of free or subsidised meals in staff canteens where meals are provided for the staff generally. The facility must be available to all employees. Otherwise, the exemption does not apply.
Re-imbursement of allowable expenses
Payments made to the employee which are no more than reimbursement of vouched expenses, actually incurred by the employee in performing the duties of the employment, should not be treated as pay. Expenses which are not treated as pay must not only be actually incurred in the performance of the duties of the employment but must also be wholly, exclusively and necessarily so incurred. Expenses which are incurred by employees in travelling to and from the place of employment are not allowable for tax purposes and any re-imbursement of these expenses must be treated as pay and taxed accordingly.
Subsistance allowances
IT 54 - Employees Subsistence Expenses contains full details regarding subsistence rates for absences within the State, absences outside the state and the rules, etc. in relation to the application of these rates.
Employers are reminded that round-sum subsistence expenses payments are taxable in full and must be treated as pay. Please see earlier paragraph 'Round-Sum Expenses'.
Payments by an employer which do no more than re-imburse an employee for allowable subsistence expenses which were actually incurred, may be made tax-free in certain circumstances, in accordance with legislation. The expenses concerned must have been incurred "wholly, exclusively and necessarily" in the performance of the duties of the employment.
Re-imbursement of allowable subsistence expenses either by Flat-Rate allowances or vouched expenses
Where an employee performs the duties of the employment while temporarily away from his/her normal place of work or is working abroad on a foreign assignment, allowable subsistence expenses can be re-imbursed by the employer on the basis of:
Acceptable flat-rate allowances (Civil Service rates or Re-imbursement of subsistence expenses based on any other schedule of rates and related conditions (e.g. country money in the Construction Industry) which do no more than re-imburse the employee for actual expenditure incurred) or Actual expenses which have been vouched with receipts.
Table of Domestic Subsistence Rates effective from 5 March 2009
Overnight Allowances Day Allowances
Normal Rate Reduced Rate Detention Rate 10 hours or more 5 hours but less than 10 hours
Class A
Class B
