Schedule E

Schedule E is the heading under which employment income is charged (s 119). The PAYE system obliges an employer to deduct tax from employee pay (s 985, 986).

An employee is not entitled to any deductions in computing employment income, unless the expenditure is incurred wholly, necessarily and exclusively in the performance of the duties of the employment (s 114).

A termination payment is subject to tax (s 123), but the first €10,160 plus €765 for each year of service may qualify for exemption. (s 201).

Benefit in kind (BIK)

An employee is taxed on expense allowances (s 117), benefit in kind (s 118), share options (s 128) and preferential loans (s 122) obtained from the employer. A loan is regarded as preferential if the interest rate is less than 4% in the case of a mortgage loan, or 13.5% in the case of any other loan.

BIK treatment does not apply to:

  • an annual or monthly bus or train pass (s 118(5A)),
  • a bicycle and associated safety equipment (costing up to €1,000) for travel to work,
  • a qualifying shopping voucher worth not more than €500 (s 112B)


Key Employee Engagement Programme (KEEP): A gain realised on the exercise of a qualifying share option in a small to medium sized enterprise will not be subject to income tax, PRSI or USC at the time of exercise.

Instead, CGT will arise when the shares are sold. The share option must be held for one year and must be exercised within 10 years. Effective 01.01.2018 to 31.12.2023.

The limits per director/employee are:

  • €100,000 in any one tax year,
  • €300,000 in all tax years,
  • total emoluments for the year the option is granted (s 128F).

Company cars


For 2019 and 2020, there is no BIK on an electric car. There is an annual exemption cap of €50,000 per vehicle.

For other cars, the employee is taxed on “notional pay” based on the cash equivalent of the benefit of use of a company car (s 121). This is calculated as a percentage of the car’s open market value (OMV) when new, inclusive of duty and VAT:

Annual business travel (km)
< 24,000 30%
24,001 to 32,000 24%
32,001 to 40,000 18%
40,001 to 48,000 12%
48,001 and upwards 6%

A new set of rates, due to come into effect by ministerial order, is based on the car’s CO2 emissions category:

A up to 120 g/km
B 120 to 140g/km
C 140 to 155 g/km
D 155 to 170 g/km
E 170 to 190 g/km
F 190 to 225 g/km
G More than 225 g/km

This gives the following BIK percentages:

Annual business travel (km)
F, G
D, E
A, B, C
< 24,000 40% 35% 30%
24,001 to 32,000 32% 28% 24%
32,001 to 40,000 24% 21% 18%
40,001 to 48,000 16% 14% 12%
48,001 and upwards 8% 7% 6%

The BIK figure can be further reduced by the amount required to be made good, and actually made good, directly to the employer in respect of the car’s running costs.

Civil service travel and subsistence rates

Compensation paid to an employee for the use of his private car is not taxed provided it complies with the following civil service rates.

up to 1200cc
 1201 – 1500cc
1501cc and over
1 0 – 1,500 km 37.95 c 39.86 c 44.79 c
2 1,501 – 5,500 km 70.00 c 73.21 c 83.53 c
3 5,501 – 25,000 km 27.55 c 29.03 c 32.21 c
4 25,001 km and over 21.36 c 22.23 c 25.85 c

You may also be paid subsistence at agreed civil service rates, without invoking a BIK charge. The day allowance rates are:

Ten hours or more: €33.61

Between five and ten hours: €14.01

Overnight allowance covers an overnight absence of up to 24 hours. This must be at least 100 km from both the employee’s home and normal place of work.

  • Normal rate: €133.73. This is for absences up to 14 nights.
  • Reduced rate: €120.36. This covers the next 14 nights.
  • Detention rate: €66.87. This covers each of the next 28 nights.
  • For absences over 56 nights, you must make an application to Revenue.

As of 01.07.2015 class of allowances for Civil Service subsistence rates has been discontinued, meaning all employees, regardless of grade, are subject to the same rates.