The provision of monthly or annual bus or train passes by an employer to an employee or director is not a taxable BIK. This exemption applies not only to transport services provided by State companies but also to transport services provided by licenced private transport operators to include travel on commuter ferry services which operate within the State in respect of journeys which begin and end in the State. In order for this exemption to apply the employer must incur the expense of the bus/train or ferry pass.
Revenue allows employers to provide a bus/train or ferry pass, to an employee and in return reduce the employee’s gross salary by an equivalent amount, known as a “salary sacrifice” arrangement. This usually results in a reduction of PAYE, PRSI and USC payable by the employee and a corresponding reduction in employer’s PRSI.