Ireland is implementing changes to income tax bands and credits starting January 2025. These changes include an increase in the standard rate cut-off point, increases to main tax credits, and a reduction in the USC rate.
A number of changes to income tax bands and credits will be reflected in January pay packets. The cut-off rate for the standard rate of income tax will rise by €2,000 to €44,000 while the main tax credits, including the personal tax credit and the employee tax credit, will increase by €125 to €2,000.
The 4 per cent rate of USC will be reduced to 3 per cent, while the entry point for the 3 per cent rate will increase in order to keep pace with the increase of the national minimum wage, which has gone up by 80 cent to €13.50 an hour. The rent tax credit increases by €250 to €1,000 for private tenants not in receipt of other State housing supports. The increase has been back-dated to cover 2024. Minister for Finance Jack Chambers said the changes taking effect today are part of “a substantial personal tax package of €1.6 billion” announced in Budget 2025. “With increases to the main tax credits and the standard rate cut-off point, together with reductions in USC, this package is primarily aimed at supporting those on lower and middle incomes, and builds on the progress already made by Government over its term,” he said. “A number of tax credits are increasing to support individuals and families with caring responsibilities. My budget package will be of direct benefit for all those who pay income tax. “As a result of the cumulative increases to the main tax credits, a single person earning €20,000 or less in 2025 will now be outside of the income tax net.” More than €1 billion of social protection increases took effect from Wednesday, including a €12 increase in weekly payments to pensioners, carers and people with disabilities
TAXATION ECONOMY BUDGET SOCIAL WELFARE MINIMUM WAGE
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