Christmas bonus tax in Ireland: PAYE, USC and PRSI explained (2026)
A cash bonus in Ireland is taxed through payroll in the pay period it is paid, with PAYE, USC and PRSI like salary. It often takes your highest rate. A non-cash voucher can be tax-free under the small benefit exemption.
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How a bonus is taxed
There is no separate bonus tax. On the normal cumulative basis, payroll adds the bonus to your pay so far this year and applies the tax credits and standard rate cut-off point you have built up since January. In 2026 a single person pays 20% up to 44,000 EUR and 40% above, less 2,000 EUR personal and 2,000 EUR employee credits. USC also runs cumulatively: 0.5% on the first 12,012 EUR, 2% up to 28,700 EUR, 3% up to 70,044 EUR and 8% above. Because the bonus sits on top of your salary, it takes your highest rates.
Why it can lose almost half
If your salary is above the cut-off point, every euro of bonus pays 40% tax, then USC (3% for most) and PRSI. Class A employee PRSI is 4.35% from 1 October 2026 and is worked out on each week's pay on its own, with no ceiling. Pension contributions reduce income tax but not USC or PRSI. On a week 1 or emergency basis, only that period's share of credits and cut-off is used, so a large bonus can be overtaxed; ask Revenue in myAccount to move you to the cumulative basis.
The small benefit exemption
Your employer can give you up to five non-cash benefits a year, such as gift vouchers, with a combined value of up to 1,500 EUR, free of PAYE, USC and PRSI. They cannot be cash or redeemable for cash, and a single benefit over 1,500 EUR is taxable in full. Unused allowance does not carry over, and only the first five benefits in a year qualify. The employer must report each one to Revenue. A voucher outside these rules is taxed as pay on your payslip.
A worked example and what to check
Roughly: on 60,000 EUR a year with a 2,000 EUR December bonus, you are already above the 44,000 EUR cut-off, so the bonus pays 800 EUR tax, 60 EUR USC (3%) and 87 EUR PRSI (4.35%). You keep about 1,053 EUR. On 36,000 EUR, the same bonus stays within the 20% band: 400 EUR tax, 60 EUR USC and 87 EUR PRSI. Check the tax basis is cumulative, the credits and cut-off match your Revenue Payroll Notification, the 4.35% PRSI rate, and that a voucher counted as a small benefit is not also taxed. Payslop checks this for free.
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Questions people ask
Will I get the tax on my bonus back?
Not on the cumulative basis: the tax is what you owe for the year. If you were on week 1 or emergency basis, request a Statement of Liability in myAccount after the year ends to get any overpayment back.
Is a voucher better than a cash bonus?
For the employee, yes, up to the limits: up to 1,500 EUR in vouchers across at most five benefits is tax-free, while the same amount in cash pays PAYE, USC and PRSI. The voucher can only be spent on goods or services.
Does my employer have to pay a Christmas bonus?
No. Ireland has no legal Christmas bonus or 13th month. It depends on your contract or company policy.
Related guides
- Your Irish payslip explained: PAYE, USC and PRSI
- Emergency tax in Ireland: why it happens and how to get it back
Indicative rules as of October 2026. Not tax or legal advice.