Below we detail the changes that will occur and how they will affect your payslip. The Budget was announced on the 10th of October 2017 and again this year there have been some favourable results but there are also some changes that tax payers may not be aware of.
- Income Tax
The standard rate Income Tax is being increased by €750. This means an increase from €33,800 to €34,500 for single individuals and from €42,800 to €43,550 for married couples with only one income. This effectively means that you will be chargeable to the standard rate of tax 20% up to this amount.
- Universal Social Charge
There have been some marginal changes to the USC rates for the year 2018. Below are the USC chargeable rates for the year 2018:
- €0 – €12,012 @ .5%
- €12,012 – €19,372 @ 2% – Increase in threshold
- €19,372 – €70,044 @ 4.75% – Decrease in percentage
- €70,044 + @8%
Medical card holders and individuals over the age of 70 whose total income does not exceed €60,000 will be required to pay a maximum USC rate of 2% which is a reduction of .5%.
- Home Carers Tax Credit
The Home Carer tax credit will increase to €1,200 which is an increase of €100. The credit is awarded when a married couple are jointly assessed and one spouse is in the home caring for one or more dependants and whose income is below €7,200.
- The Earned Income Tax Credit
The Earned Income tax credit will increase to €1,150. This is only relevant to tax payers with self-employed or professional income and for business owners/managers who are ineligible for the PAYE tax credit.
- Minimum Wage
The minimum wage is being increased from the 1st of January and will be €9.55 per hour for an adult employee.
Changes to your Payslip which were not announced in the Budget
- The Rent Tax Credit
The Rent tax credit is being abolished from the end of 2017 and there will no longer be tax relief available on private rented accommodation.
- Break in Employment
If you plan on having a significant break in employment in the year or only work for part of the year and believe that you will earn less than €13,000 then you will be exempt from paying USC for the tax year.
We would always recommend getting your taxes checked each year to ensure that you paid the correct amount of tax in the year and to claim any refunds that you may be entitled to.
Hope we have shed some light on the changes that you should expect for 2018 and Happy Christmas!