Taxes Consolidation Act 1997 section 226

Certain employment grants and recruitment subsidies

Section 226 exempts from tax a wide range of employment grants and recruitment subsidies paid to employers under various government and EU employment schemes.

• Employment grants and recruitment subsidies paid to employers under specified schemes are completely disregarded for income tax and corporation tax purposes, meaning they are tax-free in the employer's hands.
• The exemption covers grants under domestic schemes such as the Back to Work Allowance Scheme, the Wage Subsidy Scheme, the Employment Support Scheme, County Enterprise Board operating agreements, and the JobsPlus scheme.
• EU-related grants are also exempt, including those under the Leader II Community Initiative, the Operational Programme for Local Urban and Rural Development, the Peace and Reconciliation Programme, and the INTERREG Programme, as well as grants from the International Fund for Ireland.
• The exemption applies only to the grant or subsidy in the employer's hands — any wages or salaries paid by the employer to employees remain fully taxable under Schedule E, and PAYE, USC, and PRSI must be operated in the normal way.