Income from Employment

All types of remuneration received from your employment, e.g. salary, fees, wages, overtime pay, holiday pay, bonuses, commissions, tips and gratuities, are taxable and must be declared on your Income Tax Return.

Where your employer pays any of your private bills, e.g., if your employer pays for the airline tickets you have bought to go away on holiday, such a payment is assessable on you as emoluments of your employment. It makes no difference whether you receive the money direct from your employer or whether your employer makes payment direct to the person to whom the payment is due.

From the year of assessment 2004, the value of all non-cash benefits provided to you by your employer are liable to tax. Examples include the provision of free accommodation or the provision of a company car. Essentially any 'perk of the job' is regarded a taxable benefit in kind. However, there are certain benefits which are exempt e.g. group medical insurance cover for staff, mobile telephones and crèche facilities. Further details on how to determine the value of the benefit that must be declared on your income tax return form can be obtained from the Comptroller of Income Tax.

If you receive a lump sum from your employer to prevent you from resigning or to continue serving in his employment, that lump sum is taxable and must be declared on your Income Tax Return.

Certain lump sums received from an employer are not taxable. They include:

Compensation for loss of office.

Salary or wages in lieu of notice - unless the contract of employment allows the employer the right to make payment of the equivalent of salary in lieu of notice.

Redundancy payment, where redundancy is genuinely involved.

Damages for breach of contract of service.

A gratuity given on or after retirement entirely at the discretion of the employer.

Certain expenses can be claimed against your assessable emoluments. For details see the Employment Expenses leaflet.

Further advice on any of the matters in this leaflet can be obtained from the Comptroller of Income Tax.

April 2005.