Income tax rates

Income tax can feel difficult to understand, and income tax rates and brackets can be even more complicated simply because they change from year to year. With our guide to Ireland income tax rates, you’ll find answers to all your questions about the latest income tax bands and tax brackets in Ireland for 2024/25.

In Ireland, income tax is a percentage of income that the government levies on both individuals and businesses. Employed individuals typically have their income tax handled by their employers through the PAYE (Pay As You Earn) system. Taxpayers must file an annual income tax return to determine the specific tax band as per your income and the corresponding amount you’ll pay.

The revenue from income tax goes toward the development of essential public services, including healthcare, education, or infrastructure. 

The standard rate of tax applies to taxable income up to a certain threshold, i.e., €42,000 for a single individual. As of October 2023, the standard tax rate in Ireland is 20%. The balance amount is charged at 40%. For instance, if your annual income is €45,000, the standard tax rate will apply for €42,000, while the remaining €3,000 will be taxed at 40%. 

Always make sure to verify with the most recent information, as tax rates can change and can vary depending on your individual circumstances. For example, if you’re married or in a civil partnership, you may be subject to different standard rate cut-off points. You can check the most up-to-date rates on Revenue.ie.

Tax brackets for Ireland vary according to your income and personal circumstances. They will differ for single individuals, civil partners, and married couples. You can find the tax rates and tax bands for Ireland in the table below. 

Source: Citizens Information (*increase limited to the income of the lower earner or €33,000 (as of Oct 2023), whichever is lowest)

Taxpayers in Ireland have the benefit of tax credits and tax reliefs to reduce their tax liability. Both tax credits and tax reliefs are ways to help you pay less tax, either by giving you direct deductions or by reducing the amount of your taxable income. 

Tax Credits: Think of tax credits like coupons that directly reduce the amount of tax you owe. They’re instant discounts on your taxes. For example, employment tax credits, home carer tax credit, or single person child carer credit or SPCCC.

Tax Reliefs: Tax reliefs are special rules that let you pay less tax because you spent money on certain things. For instance, health expenses, donating to charity, or saving for your retirement may qualify for tax reliefs.

You can calculate your income tax in a few simple steps as listed below:

Calculate your total income: Add up all your earnings, including salary, wages, bonuses, rental income, etc.

Apply tax credits: Subtract any tax credits you're entitled to from your total income.

Apply tax bands: Depending on your income, apply the relevant tax rates. For instance, the first portion of your income is taxed at 20%, the next portion at 40%, and so on (as per the tax brackets mentioned earlier).

Factor in tax reliefs: If you have any allowable tax reliefs (like medical expenses, pension contributions, etc.), subtract them from your taxable income.

Calculate the tax due: Once you’ve accounted for your tax credits and reliefs, apply the appropriate tax rates to determine the tax due on each portion of your income. Add these together to find your total income tax liability.

It's also essential to consider any additional taxes or contributions that might apply, such as USC (Universal Social Charge) and PRSI (Pay-Related Social Insurance).

You may even use official tax calculators provided by the Revenue service in Ireland or consult a tax professional to get your taxable income and final tax liability. 

In Ireland, the higher tax bracket kicks in for individuals earning above €42,000. Income above this threshold is taxed at the higher rate of 40%. This is subject to change depending on your personal circumstances. 

In Ireland, income tax is applied to various types of income, including earnings from employment, pensions, rental income, and savings interest. The tax rates for savings interest are typically aligned with the standard income tax rates, depending on the individual's total income.

The most important tax on savings is DIRT or Deposit Interest Retention Tax. Learn more about DIRT.