Income Tax Ireland

Ireland has two income tax rates: 20% (the standard rate) and 40% (the higher rate). Which rate applies depends on your income and your personal circumstances.

For a single person in 2025, the first €42,000 of income is taxed at 20%. Everything above €42,000 is taxed at 40%. This threshold is called the standard rate cut-off point.

Here's what that looks like in practice. If you earn €50,000, you pay 20% on the first €42,000 (€8,400) and 40% on the remaining €8,000 (€3,200). That's a total of €11,600 in income tax before any credits are applied.

Married couples and civil partners have a higher cut-off. For a couple where one person works, the cut-off is €51,000. Where both work, the cut-off can be higher — up to €84,000 combined. This is one of the most meaningful tax advantages of being married in Ireland.

Every Irish payslip has three deductions, not one:

• Income tax — what this page covers
• USC (Universal Social Charge) — a separate charge on gross income, explained in full on /paye
• PRSI — pays for social insurance entitlements (Jobseeker's, maternity benefit, state pension)

Your employer calculates all three and deducts them before you receive anything. This is the PAYE (Pay As You Earn) system.

Tax credits reduce your actual tax bill directly — not your income. A €1,000 credit means you pay €1,000 less tax, regardless of your rate.

Every PAYE employee gets two credits automatically:

• Personal Tax Credit — €1,875 per year
• Employee Tax Credit — €1,875 per year

Combined, that's €3,750 off your annual tax bill. In practical terms, this means roughly the first €18,750 of your income is effectively tax-free.

Other credits you may be entitled to but have to claim yourself:

• Rent tax credit — €1,000/year for renters (see above)
• Single Person Child Carer Credit — €1,750/year
• Home Carer Credit — up to €1,800/year for a spouse who cares at home
• Tuition fees — 20% relief on college fees above €3,000 (€1,500 per student)
• Health expenses — 20% relief on qualifying out-of-pocket medical costs

Claim all of these through myAccount at revenue.ie. Most are straightforward — you select the credit, enter the relevant amounts, and Revenue applies them.

Overpaying tax is more common than you'd think. You may have overpaid if you:

• Started a new job mid-year (your credits are divided across 12 months, so if you worked 6 months you'd have used half the credits against a full year's entitlement)
• Were unemployed for part of the year
• Were on emergency tax when starting a job (see /emergency-tax)
• Have unclaimed credits (rent, health expenses, tuition) going back up to 4 years

How to request a review: Log in to myaccount.revenue.ie → select "Review your tax" → choose the year → submit. Revenue calculates whether you overpaid or underpaid. If you're owed a refund, it's typically in your account within 5 working days.

You can claim back up to 4 years. So in 2025 you can review 2021, 2022, 2023, and 2024. For most people who've never done this, it's worth spending 10 minutes now.

The standard rate cut-off, tax credits, USC thresholds, and PRSI rates are all reviewed in the annual Budget each October. The changes typically take effect from 1 January the following year.

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