{"id":13863,"date":"2019-02-20T11:58:51","date_gmt":"2019-02-20T09:58:51","guid":{"rendered":"https:\/\/seoblog.taxback.com\/?p=13863"},"modified":"2019-02-20T12:00:48","modified_gmt":"2019-02-20T10:00:48","slug":"do-i-have-to-pay-tax-on-my-benefit-in-kind-gym-membership","status":"publish","type":"post","link":"https:\/\/www.taxback.com\/blog\/do-i-have-to-pay-tax-on-my-benefit-in-kind-gym-membership\/","title":{"rendered":"Do I Have to Pay Tax on my Benefit in Kind Gym Membership?"},"content":{"rendered":"

Does your employer provide health and fitness facilities or a gym membership? If so, then chances are, you\u2019re subject to pay tax on that benefit.<\/p>\n

It seems everyone\u2019s gone fitness mad and employers are getting in on the action but what most people don\u2019t realise is that we are often taxed on the benefits we receive in our jobs.<\/p>\n

In fact, benefits can end up being quite costly. If you earn more than \u20ac1,905 per year, which is highly likely, you must legally pay tax on all kinds of benefits and perks provided by your employer. This tax can be subject to a tax rate of up to 52%.<\/p>\n\n

Benefits vs. benefits-in-kind<\/b><\/h2>\n

There are two categories of benefits that your employer may award you. Benefits-in-kind and standard benefits. So, what\u2019s the difference and why does it matter<\/i>?<\/p>\n

Well,\u00a0benefits\u00a0<\/b>include holidays, vouchers, prizes, and payment of an employee\u2019s bills while\u00a0benefits-in-kind\u00a0<\/b>include things like a company car, loans given at a special rate, provision of accommodation and gym memberships.<\/p>\n

And yes, the difference is important because they are both taxed differently.<\/i><\/p>\n

Need help filing your self-assessed tax return?<\/strong><\/p>\r\n

Contact Us Today<\/a><\/p>\n

How are benefits taxed?<\/b><\/h2>\n

Taxation of benefits that are\u00a0not\u00a0<\/b>classed as BIK are made on the literal value of the benefit. So if your employer gives you a holiday voucher worth \u20ac1,000. That \u20ac1,000 is treated as income for tax purposes and will be taxed accordingly.<\/p>\n

How does the taxation of BIK work?<\/b><\/h2>\n

BIK stands for benefit-in-kind. It is any non-cash benefit of monetary value that an employer provides for an employee \u2013 in this case, a gym membership. This kind of benefit is sometimes known as notional pay, fringe benefits or perks.<\/p>\n

These benefits have a monetary value which unfortunately means, that they must be treated as taxable income and are then subject to PAYE, USC and PRSI which is deducted from your pay, by your employer.<\/p>\n

Benefits-in-kind differ from standard benefits in the sense that they have a monetary cash value but cannot be converted into cash.<\/p>\n

What are the conditions for taxing BIK<\/b><\/h2>\n

There are of course some rules and conditions for taxing BIK\u2026<\/p>\n

For instance, if your total income (including benefits) is more than \u20ac1,905 per year, then you must pay tax on your benefits. Income from any previous jobs you had in that year is not\u00a0<\/b>counted towards the \u20ac1,905 limit. However, in the case that you worked for more than one company, under the same parent company, then your combined income from each job counts as one.<\/p>\n

If your employer gives a benefit to your husband, wife, civil partner, family member or guest then this person must pay tax on the benefit.<\/p>\n

If you\u2019re a company director, you must pay tax on any BIK, regardless of your total income.<\/p>\n

Small benefits<\/b><\/h2>\n

Your employer may give you what is known as a \u2018small benefit\u2019 tax-free. This is a once-off benefit worth no more than \u20ac500 per year \u2013 this number was \u20ac250 up until 21 October 2015. Small benefits cannot be in cash and if more than one is given to you in a year, only the first qualifies for taxation.<\/p>\n

So say your employer pays a 6-month gym membership at \u20ac500, you won\u2019t be taxed on that. Say they then pay for a further 3 months membership later on in the year at \u20ac300, you will be taxed on the first membership, but not the second.<\/p>\n

\"Internal<\/h2>\n

Internal and external facilities<\/b><\/h2>\n

Internal<\/i><\/h3>\n

It\u2019s important to note that if your place of work provides sports and recreational facilities that are available to all employees, this is\u00a0not\u00a0<\/b>a benefit-in-kind.<\/p>\n

If the facilities are only available to certain employees, it is benefit-in-kind which means that the employees who use these facilities will be charged PAYE, PRSI and USC. This kind of goes without saying but your employer can only charge you if you choose to avail of the facilities.<\/p>\n

To calculate the tax on a benefit in this scenario, your employer will divide the cost among all employees who choose to use it. Essentially, you pay tax on the amount it\u2019s costing your employer.<\/p>\n

External<\/i><\/h3>\n

So your employer has decided to pay for corporate membership to external sports or recreational facilities. If you choose to avail of the offer, you will be taxed PAYE, PRSI and USC on it.<\/p>\n

Again, to calculate the value of the benefit correctly, the cost paid by your employer will be divided equally among all employees who choose to avail of the benefit.<\/p>\n

Up until 2004, BIK-related taxes were self-assessed but now your employer must deduct the fee automatically. If you feel that you\u2019ve been overcharged on BIK or you\u2019d like to apply for a tax refund, don\u2019t hesitate to contact Taxback and we\u2019ll answer any questions you might have we\u2019ll provide a free no-obligation refund estimate.<\/p>\n","protected":false},"excerpt":{"rendered":"Does your employer provide gym memberships or fitness perks? You might be paying more tax than you realize! Learn how benefits and benefits-in-kind (BIK) are taxed and discover how to claim a refund if you’ve overpaid.\n","protected":false},"author":388,"featured_media":13865,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"yes","_lmt_disable":"no","footnotes":""},"categories":[368,361],"tags":[],"class_list":{"0":"post-13863","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-tax-tips-ireland","8":"category-tax-tips"},"acf":[],"yoast_head":"\nAre You Taxed on Employer-Provided Gym Memberships? Find Out Now!<\/title>\n<meta name=\"description\" content=\"Confused about taxes on employer benefits like gym memberships? 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