2020 Payslip Changes
Below we detail some of the 2020 Payslip Changes that may occur for you based on the recent Budget 2020 and how they will affect your payslip in 2020. The Budget was announced on the 8th of October 2019 and there are also some changes that tax payers may not be aware of outside of their payslip as well.
Income Tax
There are no changes to the income tax rate bands. The tax rate band for a Single Individual remains the same – €35,300, for Married couples with only one income – €44,300 and up to €70,600 for Married couples with 2 incomes. This effectively means that you will be chargeable to the standard rate of tax 20% up to this amount.
Universal Social Charge
There are no changes for USC either. Below are the USC chargeable rates for the year 2020:
- €0 – €12,012 @ 0.5%
- €12,012.01 – €19,874 @ 2%
- €19,874.01 – €70,044 @ 4.5%
- €70,044.01 + @ 8%
The current reduced rate of USC for eligible medical card holders is extended to 2020. Full 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%.
No changes to USC Exempt Categories – if an individual’s income for the year does not exceed €13,000, they are exempt from paying USC.
Home Carers Tax Credit
The Home Carer tax credit will increase to €1,600 in 2020, 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 dependents and whose income is below €7,200.
The Earned Income Tax Credit
The Earned Income tax credit will increase to €1,500. 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.
Capital Acquisition Tax
The Group A tax-free threshold (tax on gifts and inheritance from parents to their children) will increase from €320,000 to €335,000. this increase applies for gifts or inheritances received on or after 09/10/2019. There are no changes to Groups B and C tax-free thresholds.
Help-to-Buy Scheme
Help-to-Buy scheme has been extended to the end of 2021. The scheme remains subject to the same conditions.
Benefit-in-Kind (BIK)
The BIK exemption for electric cars and vans with a market value of less than €50,000 has been extended to the end of 2022.
We would always recommend getting your taxes checked each year to ensure that you paid the correct amount of tax in the previous 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 2020 and Happy Christmas!
Best Wishes,
Dalia Simanskyte
Tax Refunds Manager
