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Budget 2024 Tax Policy Changes Tithe an Rialtais, Sráid Mhuirfean Uacht, Baile Átha Cliath 2, D02 R583, Éire Government Buildings, Upper Merrion Street, Dublin 2, D02 R583, Ireland T: +353 1 676 7571 | @IRLDeptFinance www.gov.ie/ﬁnance Prepared by the Department of Finance gov.ie/budget | #Budget2024 Budget 2024 Tax Policy Changes Le ceannach díreach ó FOILSEACHÁIN RIALTAIS, BÓTHAR BHAILE UÍ BHEOLÁIN, BAILE ÁTHA CLIATH 8.
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Price €5.00 Department of Finance | Tax Policy Changes Page | ii Contents Procedural, technical and other relevant issues Summary of Budget 2024 Tax Policy Changes Introduction Key objectives of taxation policy in Budget 2024 Description of taxation measures for introduction in 2024 Personal income tax Supporting Enterprise, SMEs, the agri-food sector and climate Supporting the housing market Helping households and firms with the cost of living Other tax measures Capital Gains Tax Angel Investor Relief Mortgage Interest Tax Relief Distributional analysis of tax policy changes Introduction Net Income (take-home pay) changes arising from personal tax changes Income (take-home) changes arising from personal tax changes Effective tax rates Other information Tax measures for introduction in 2024, € million Single person, no children, private sector employee taxed under PAYE, full rate PRSI contributor Married couple, one income, no children, private sector employee taxed under PAYE, full rate PRSI contributor Married couple, one income, two children, private sector employee taxed under PAYE, full rate PRSI contributor Single person, no children, taxed under Schedule D (self-employed) Married couple, one income, no children, taxed under Schedule D (self- employed) Married couple, one income, two children, taxed under Schedule D (self- employed) Single person, full rate PRSI – effective tax rate Married / civil partner, one income, two children, full rate PRSI – effective tax rate 1 1.1 1.2 2 2.1 2.2 2.3 2.4 2.5 3 4 5 5.1 5.2 5.3 5.4 5.5 Tables Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Table 9 Table 10 Self-employed, single – effective tax rate Table 11 Self-employed, married / civil partner, one income, two children – effective tax rate Table 12 Estimated distribution of income earners on the income tax file for 2024 Table 13 Estimated distribution of income earners on the income tax file for 2024 page v Department of
26 26 Department of Finance | Tax Policy Changes Page | iii Department of Finance | Tax Policy Changes Page | iv Procedural, technical and other relevant issues 1. corrections policy The data and analysis set out in this document are compiled by Department of Finance staff; every effort is made to ensure accuracy and completeness.
If errors are discovered, subsequent corrections and revisions are incorporated into the digital version available on the Department’s website.

Any substantive change is detailed in the online version.

2. tables The document contains several tables.

These illustrates the effect of the Budget measures on a small range of different categories of income earners and household types.

3. rounding Rounding can affect totals in all tables in this document.
4. presentation before parliament The document was laid before (formally presented to) the Oireachtas on 10th October 2023.

5. additional information Additional information and related documents are available on the Budget 2024 website (www.gov.ie).

Department of Finance | Tax Policy Changes Page | v Department of Finance | Tax Policy Changes Page | vi Chapter 1 Summary of Budget 2024 Tax Policy Changes 1.1 Introduction This chapter outlines the tax policy changes set out in Budget 2024.
Table 1 below shows the cost (presented as a negative figure) or yield (presented as a positive figure) of the tax measures; in some cases, the first year and full year costs are provided.

1 The costs are estimated by Department of Finance officials working in conjunction with colleagues in the Revenue Commissioners.
1.2 Key objectives of taxation policy in Budget 2024 In setting taxation policy, the Government has identified a number of key objectives: ˃ To support workers; ˃ To promote enterprise; ˃ To support Government commitments on housing; ˃ To help households and firms with the cost of living.

With these objectives in mind, the Government is providing for the tax measures set out in table 1.

This table summarises the main policy initiatives; more detail is provided in chapter 2.
2 Table 1: Tax measures for introduction in 2024, € million First year Cost/Yield -975 Full-year Cost/Yield -1,135 Personal taxation: supporting workers Income tax : increase of €2,000 in income tax standard rate cut-off point : increase of €100 in the Personal Tax Credit : increase of €100 in the Employee Tax Credit : increase of €100 in the Earned Income Credit : increase of €100 in the Home Carer Tax Credit : increase of €100 in the Single Person Child Carer Tax Credit : increase of €200 in the Incapacitated Child Tax Credit USC : increase the 2% rate band ceiling by €2,840 -315 -365 : reduce the 4.5% USC rate to 4% : extend the reduced rate of USC concession for medical card holders to 31/12/2025 -35 -35 1 If a tax policy measure does not take effect from the beginning of the year, there will be a difference between its cost/yield in the first year and its cost/yield in a full year.
All figures are estimates based on the latest available data.

2 A negative cost implies a yield.
Department of Finance | Tax Policy Changes Page | 1 Sea-going naval personnel tax credit - 0.5 - : extend sea-going naval personnel tax credit to 31/12/2024 Supporting Enterprise, SMEs, agri-sector and climate Angel Investor Capital Gains Tax Relief : provide new relief for eligible investments in innovative start-ups 3 Capital Gains Tax Retirement Relief 4 : increase the age limit from 66 to 70 and introduce a limit of €10 million on the relief available for disposals Relief for Investment in Corporate Trades : standardise the EII minimum holding period, increase the EII investment limit and provide for EU General Block Exemption Regulation amendments Research and Development Tax Credit5 : increase the rate from 25% to 30% and increase the year one payment threshold from €25,000 to €50,000 First year Cost/Yield Full-year Cost/Yield - - - - -55 -21 - -27 Accelerated Capital Allowances – Energy Efficient Equipment (ACA EEE) 6 : extend scheme to 31/12/2025 -7 - Section 481 Film Relief : increase the cap on eligible expenditure from €70 million to €125 million.
-10 -53 Microgeneration of Electricity : increase in exemption from €200 to €400 VAT Registration Thresholds -4.5 -4.5 : increase the registration thresholds for goods and services -5 -6 Consanguinity (Stamp Duty) Relief : extend relief to 31/12/2028 -27 -27 Accelerated Capital Allowances – Farm Safety Equipment : extend accelerated wear and tear allowances to 31/12/2026 -1 -1 3 No cost for this relief until 2027 as investment must be held for a minimum of 3 years.

4 No cost for these changes until 2025.


5 Cost shown is net of yield from Pillar Two taxation of R&D tax credit.

No 2024 cost as claims in respect of 2024 expenditure will be filed in 2025.

6 The scheme provides for an acceleration of existing allowances, therefore is net cost neutral over the life of the asset.
Department of Finance | Tax Policy Changes Page | 2 Young Trained Farmers and Succession Farm Partnerships : increase limit from €70,000 to €100,000 -0.5 -0.5 Registered Farm Partnerships : increase maximum amount of stock relief that can be claimed from €15,000 to €20,000 -0.1 -0.1 Supporting Housing Help to Buy : amend to include units purchased under the local authority affordable purchase scheme and extend the Help to Buy scheme to 31/12/2025 First year Cost/Yield Full-year Cost/Yield -6 -181 Rented Residential Relief : introduce rental income relief for landlords of €3,000 for 20247 -45 -160 Rent Tax Credit : increase tax credit for private tenants8 to €750 and extend eligibility for students in “digs” -88 -88 Vacant Homes Tax : increase to five times the property’s LPT charge - 1 Indirect taxation VAT : apply zero VAT rate for audiobooks and ebooks : apply zero VAT rate for solar panels for schools : increase Fund for VAT Charity Compensation Scheme : reduce flat-rate compensation for farmers to 4.8% Excise Duty : increase of 75c on pack of 20 cigarettes : pro-rata increase on other tobacco products.
First year Cost/Yield Full-year Cost/Yield -2.5 -0.5 -5 15 -3 -0.5 -5 18 7.59 68 7 Relief will apply at the standard 20% rate.

The relief will be €3,000 for 2024, €4,000 for 2025 and €5,000 for 2026 and 2027, which is equivalent to a tax credit for landlords of up to €600, €800 and €1,000 respectively.

Scheme to end in 2027.

Further conditions apply.

8 For those not in receipt of other State housing supports.
9 First year cost for cigarettes is 2023, as the measure has effect from day after budget Department of Finance | Tax Policy Changes Page | 3 Carbon Tax Carbon Tax10,11 : increase rate from €48.50 to €56.00 per tonne of CO2 : apply new rate to auto fuels from 11/10/2023 and all other fuels from 01/05/2024 Other tax measures : extend VRT relief for battery electric vehicles to 31/12/2025 : increase threshold for donations of Heritage Items : amend the Defective Concrete Products Levy to exclude precast products : introduce a revised Bank Levy for 2024 : compliance Cost of living measures : extend MOT rate reduction to 31/03/2024; restore half 01/04/2024 and half 01/08/2024 : extend 9% VAT rate for gas and electricity to 31/10/2024 : introduce one year mortgage interest tax relief : extend BIK relief of €10,000 applied to Original Market Value Deduction for certain categories of vehicles to 31/12/2024 : extend tapering mechanism applied to BIK relief for Electric Vehicles of €35,000 to 31/12/2025, €20,000 in 2026 and €10,000 in 2027 First year Cost/Yield 117 Full-year Cost/Yield 152 First year Cost/Yield -27 Full-year Cost/Yield -30 -1 -7 200 120 2023 -49 - - - - -1.5 -7 120 2024 -122 -315 -125 - - 10 VAT exclusive revenue.
11 Revenue from carbon tax increases are fully hypothecated to specific spending commitments.

For details please see the Expenditure Report 2023.

Department of Finance | Tax Policy Changes Page | 4 Chapter 2 Description of taxation measures for introduction in 2024 2.1 Personal income tax The Government is committed to supporting workers and ensuring efficient labour market outcomes.

In progressing this commitment, the Government is announcing a number of personal tax measures as part of Budget 2024.
2.1.1: Income Tax An increase of €2,000 in the income tax standard rate band cut-off point for all earners: ˃ Single, widowed or surviving civil partner from €40,000 to €42,000; ˃ Single, widowed or surviving civil partners, qualifying for the Single Person Child Carer Credit from €44,000 to €46,000; ˃ Married couples or civil partners (one income) from €49,000 to €51,000; ˃ Married couples or civil partners (two incomes) from €49,000 to €51,000 (with an increase of €33,000 max12).
Government is also adjusting the income tax credits, with Budget 2024 providing for the following changes: ˃ An increase of €100 in the Personal Tax Credit from €1,775 to €1,875.

˃ An increase of €100 in the Employee Tax Credit from €1,775 to €1,875.

˃ An increase of €100 in the Earned Income Credit from €1,775 to €1,875.

˃ An increase of €100 in the Home Carer Tax Credit from €1,700 to €1,800.

˃ An increase of €100 in the Single Person Child Carer Tax Credit from €1,650 to €1,750.
˃ An increase of €200 in the Incapacitated Child Tax Credit from €3,300 to €3,500.

2.1.2: Universal Social Charge Government is providing for an increase in the ceiling for the 2% rate of USC of €2,840 from €22,920 to €25,760.

The increase in the 2% rate band ceiling will ensure that a full-time adult worker who benefits from the increase in the hourly minimum wage rate from €11.30 to €12.70 will remain outside the top rates of USC.

Government is also reducing the 4.5% rate of USC by 0.5% to 4.0%.
This rate applies to income between €25,761 and €70,044.

Incomes of less than €13,000 are exempt from USC.

Otherwise, the following USC rates and bands will apply from 1 January 2024: 12 The increase in the rate band is capped at the lower of €33,000 or the income of the lower earner.
Department of Finance | Tax Policy Changes Page | 5 ˃ €0 – €12,012 @ 0.5% ˃ €12,013 – €25,760 @ 2% ˃ €25,761 – €70,044 @ 4% ˃ €70,045+ @ 8% ˃ Self-employed income over €100,000: 3% surcharge The USC concession for medical card holders is being extended for a further two years to 31 December 2025.

Reduced rates of USC apply to individuals who have a full medical card and whose income is €60,000 or less per annum.

The reduced rates of USC are 0.5% on the first €12,012 and 2% on the balance.
2.1.3: Sea-going naval personnel tax credit This tax credit is being extended to 31 December 2024.

It applies where a permanent member of the Irish Naval Service spends at least 80 days at sea on board a naval vessel in the previous tax year.

In such circumstances, they are entitled to a tax credit of €1,500.

2.2 Supporting Enterprise, SMEs, the agri-food sector and climate The Government is committed to supporting enterprise and Budget 2024 continues this approach with several changes being announced.
2.2.1: New Capital Gains Tax relief for Angel investment in innovative start-ups A new capital gains tax relief for angel investment in innovative start-ups is being introduced.

Qualifying investors can benefit from a reduced rate of capital gains tax for gains arising from the disposal of a qualifying investment in a qualifying company, up to a maximum gain of twice their initial investment.

Further information is contained in Chapter 3.


2.2.2: Retirement Relief From 1 January 2025, the higher level of relief, which applies on disposals to children and to others, will be available for disposals occurring from the age of 55 until the age of 70.

Also from 1 January 2025, there will be a new limit of €10 million on the relief available for disposals to a child up until the age of 70.
2.2.3: Employment Investment Incentive (EII) The EII provides income tax relief for risk capital investments in qualifying small and medium enterprises.

From 1 January 2024, the minimum holding period required to obtain relief is being standardised to four years for all investments, and the limit on the amount that an investor can claim relief on for such investments is being increased to €500,000.
Further changes will be made to the scheme to reflect Department of Finance | Tax Policy Changes Page | 6 amendments to the EU General Block Exemption Regulation and details will be set out in the Finance Bill.

2.2.4: Research and Development Tax Credit The Research and Development (R&D) tax credit provides a 25% tax credit for qualifying R&D expenditure.

The rate is being increased from 25% to 30% in respect of 2024 expenditure, for which claims will be filed in 2025.
The first year payment threshold allows for a claim up to the threshold amount to be paid in full in year 1, rather than over three years.

The current threshold of €25,000 is being increased to €50,000.

2.2.5: Accelerated Capital Allowances – Energy Efficient Equipment The Accelerated Capital Allowances (ACA) scheme for Energy Efficient Equipment (EEE) provides a tax incentive for companies and unincorporated businesses who invest in highly-EEE.
The scheme is being extended for a further two years to 31 December 2025.

2.2.6: Section 481 Film Relief Film relief provides relief in the form of a corporation tax credit for the qualifying costs of certain audiovisual productions.

The maximum qualifying expenditure in respect of which the 32% credit can currently be granted is capped at €70 million.

This cap is being increased to €125 million.


2.2.7: Microgeneration of electricity Micro-generation of electricity is the small-scale production of electricity by consumers who generate electricity at their own homes for their own consumption and sell the excess electricity produced.
There will be an increase from €200 to €400 in the exemption from income tax, USC and PRSI for certain profits arising to a qualifying individual who generates energy from renewable, sustainable or alternative energy sources for their own consumption.

The exempted profits are those arising from the domestic generation of electricity which is supplied to the grid.
2.2.8: Increase in VAT Registration Thresholds From 1 January 2024, the existing VAT registration thresholds are being increased from €37,500 for services and €75,000 for goods to €40,000 for services and €80,000 for goods.

2.2.9: Consanguinity (Stamp Duty) Relief This stamp duty relief is being extended to 31 December 2028.

It reduces the rate of stamp duty applicable to intra-familial transfers of farmland from 7.5% to 1%.
2.2.10: Accelerated Capital Allowances – Farm Safety Equipment This scheme, which allows for accelerated capital allowances of 50% per annum for eligible equipment, is being extended to 31 December 2026.
Department of Finance | Tax Policy Changes Page | 7 2.2.11: Young Trained Farmers and Succession Farm Partnerships Stock relief for young trained farmers, relief for succession farm partnerships and young trained farmers stamp duty relief are being amended to increase the aggregate lifetime amount of relief available to a person under these reliefs from €70,000 to €100,000 from 1 January 2024.
2.2.12: Stock Relief (Registered Farm Partnerships) Stock relief for registered farm partnerships is being amended to increase the threshold from €15,000 to €20,000 in the case of qualifying periods commencing on or after 1 January 2024.

2.3 Supporting the housing market 2.3.1: Help to Buy (HTB) The Help to Buy Scheme is being extended for a further year until 31 December 2025.

The scheme is also being amended to reflect its interaction with the Local Authority Affordable Purchase Scheme (LAAP).
This amendment will enable the use of the affordable dwelling contribution received through the LAAP scheme for the purposes of calculating the 70% loan-to-value requirement, thereby facilitating access to all LAAP purchasers to the HTB scheme.

This will come into effect from 11 October 2023.

2.3.2: Rented Residential Relief A new tax relief for landlords is being introduced.

It will provide a relief, at the standard rate, of residential rental income.
The relief will be as follows: €3,000 in the tax year 2024; €4,000 in 2025, €5,000 in 2026 and €5,000 in 2027.

A full claw-back of the benefit of the relief applies in the event the landlord removes from the rental market, within 4 years, any of the rental properties held in year 1 when the benefit is claimed.

There is no clawback after the expiry of the 4-year period.
The relief relates only to tenancies registered with the Residential Tenancies Board, or where a landlord lets a residential property to a public authority (including a Local Authority).

In the case of joint ownership of a property, the relief will be divided in proportion to the percentage of the rental income to which each owner is entitled.

Further detail will be set out in the Finance Bill.
2.3.3: Rent Tax Credit The rent tax credit is being amended to increase the amount that can be claimed from €500 to €750.

As before, the credit will be available to renters who are not already availing of State housing supports.

The proposal relates only to tenancies registered with the Residential Tenancies Board and licences for the use of a room in another person’s principal private residence.
Eligibility for the credit will be extended to parents who pay for their student children’s rental accommodation in the case of Rent a Room accommodation or “digs”.

This change will apply retrospectively to the years 2022 and 2023.

Department of Finance | Tax Policy Changes Page | 8 2.3.4: Vacant Homes Tax The rate of the Vacant Homes Tax is being increased from three times to five times a property’s existing base Local Property Tax liability.
This increase will take effect from the next chargeable period, commencing 1 November 2023.

2.4 Helping households and firms with the cost of living 2.4.1: Temporary Excise Rate Reduction The temporary excise rate reductions applying to auto diesel, petrol and marked gas oil which were due to expire on 31 October 2023 are being extended until 31 March 2024.
Half of the outstanding amounts of 8 cent on petrol, 6 cent on diesel and 3.4 cent on Marked Gas Oil will be restored on 1 April 2024, with the balance restored on 1 August 2024.

2.4.2: VAT rate for gas and electricity The 9% VAT reduction for gas and electricity is being extended for an additional 12 months, until 31 October 2024.
2.4.3: Mortgage Interest Tax Relief A temporary one-year mortgage interest tax relief scheme is being introduced for homeowners with an outstanding mortgage balance on their principal private residence of between €80,000 and €500,000 on 31 December 2022.
Qualifying homeowners will be eligible for mortgage interest tax relief in respect of the increased interest paid on that loan between the calendar year 2022 compared to the calendar year 2023 at the standard rate of income tax (20%), capped at €1,250 per property.

Further information is contained in Chapter 4.

2.4.4: Charities Compensation Scheme From 1 January 2024, the total annual capped fund for the Charities VAT Compensation Scheme is being increased up from €5 million, to €10 million.
2.4.5: VAT rate for audio books and ebooks.

From 1 January 2024, the VAT rate for audiobooks and e-books is being reduced from 9% to zero.

2.4.6: BIK Measure: Original Market Value Deduction for Certain Categories of Vehicles The temporary universal relief of €10,000 applied to the Original Market Value of a vehicle (including vans) for vehicles in Category A-D and the amendment to the lower limit of the highest mileage band is being extended to 31 December 2024.
Department of Finance | Tax Policy Changes Page | 9 2.4.7: BIK Measure: Relief for Battery Electric Vehicles The tapering mechanism applied to benefit in kind relief for electric vehicles is being enhanced by extending the current Original Market Value deduction of €35,000 until end 2025, followed by a reduction to €20,000 in 2026 and €10,000 in 2027.
2.5 Other tax measures 2.5.1: VAT rate on the supply and installation of solar panels in schools From 1 January 2024, the VAT rate for the supply and installation of solar panels installed in schools is being reduced to zero.

2.5.2: VRT Relief for Battery Electric Vehicles The VRT relief for battery electric vehicles, which was due to end on the 31 December 2023, is being extended by two years to 31 December 2025.
2.5.3: Farmer’s Flat Rate compensation The flat-rate scheme compensates unregistered farmers on an overall basis for VAT incurred on their farming inputs.

Based on macro-economic data received from the CSO and the Revenue Commissioners for the period 2021-2023, this rate will decrease from the current 5.0% to 4.8% from 1 January 2024.
2.5.4: Tobacco Excise duty on tobacco products is being increased by 75 cent, inclusive of VAT, on a pack of 20 cigarettes in the most popular price category together with pro rata increases for other tobacco products.

2.5.5: Carbon Tax The rate per tonne of carbon dioxide emitted for petrol and diesel will increase from €48.50 to €56.00 from 11 October as per the trajectory set out in the Finance Act 2020.
This increase will be applied to auto diesel and petrol with effect from 11 October 2023 and to all other fuels with effect from 1 May 2024.

2.5.6: Increase Threshold for Donations of Heritage Items This tax relief is available to taxpayers who donate heritage items to Irish national collections.

A credit equal to 80% of the market value of the item donated can be set against donors’ liabilities for income tax, corporation tax, capital gains tax or gift and inheritance tax.
Currently, the aggregate value of items that can be donated under the scheme in any one year cannot exceed €6 million, this limit is to be increased to €8 million.

Department of Finance | Tax Policy Changes Page | 10 2.5.7 Bank Levy A revised bank levy is being introduced for 2024.

It will apply to those banks that received financial assistance from the State during the banking crisis, (AIB, EBS, Bank of Ireland and PTSB).

It will have a revenue target of €200 million.


2.5.8: Defective Concrete Products Levy This levy is being amended so that it will no longer apply to the pouring concrete used in the manufacture of precast concrete products.

A refund scheme is also being put in place to allow those who paid the levy on such concrete between 1 September 2023 and 31 December 2023 to reclaim it.

2.5.9: Compliance Revenue will conduct a range of targeted compliance management activities in 2024.
It is expected that additional Exchequer receipts will arise from increased taxpayer compliance in the areas of eCommerce, payroll and expenses reporting and the cash/shadow economy.

Department of Finance | Tax Policy Changes Page | 11 Chapter 3 Capital Gains Tax Angel Investor Relief This new relief is being introduced to encourage angel investment innovative start-ups, in line with the recommendation from the Commission on Taxation and Welfare.
The relief will be available to an individual who invests in an innovative start-up small and medium enterprise (SME) for a period of at least 3 years.

The investment by the individual must be in the form of fully paid-up newly issued shares costing at least €10,000 and constituting between 5% and 49% of the ordinary issued share capital of the company.
The scheme will include a certification process, which will be carried out by Enterprise Ireland, to ensure the relief is targeted at innovative SMEs that can demonstrate financial viability and compliance with the requirements of the EU General Block Exemption Regulation.

Qualifying investors may avail of an effective reduced rate of CGT of 16%, or 18% if through a partnership, on a gain up to twice the value of their initial investment.
There is a lifetime limit of €3 million on gains to which the reduced rate of CGT will apply.

Further detail will be set out in the Finance Bill.

Department of Finance | Tax Policy Changes Page | 12 Chapter 4 Mortgage Interest Tax Relief In light of the current high interest rate environment, a temporary one-year mortgage interest tax relief is being introduced.
The relief will be available to taxpayers in respect of their mortgage on their principal private residence in the State where: • • the outstanding mortgage balance was between €80,000 and €500,000 on 31 December 2022, and the taxpayer is compliant with Local Property Tax (LPT) requirements.

Mortgage interest tax relief will be available at the standard rate of income tax in respect of the increase in the interest paid between the calendar year 2022 compared to the calendar year 2023.
The maximum value of the relief is €1,250 per property.

To claim the mortgage interest tax relief, the taxpayer must file a tax return with Revenue.

The relief will operate by way of a credit offset against the taxpayer’s income tax liability in 2023.

It is anticipated that the relief may be claimed in early 2024.

Further detail will be set out in the Finance Bill.
Department of Finance | Tax Policy Changes Page | 13 Chapter 5 Distributional analysis of tax policy changes 5.1 Introduction The purpose of this chapter is to illustrate the effect of the Budget measures on a range of different categories of income earners and household types.
The following distribution tables focus on the impact of measures for certain family types affected by the changes in Budget 2024 – single individuals, married couples, families with children - across a range of income levels from €15,000 to €175,000.

5.2 Net Income (take-home pay) changes arising from personal tax changes The examples are based on specimen incomes from both employment and self-employment sources.
These cases deal with basic personal tax credits, the PAYE employee tax credit, earned income credit, the home carer tax credit, the standard rate bands, PRSI and the Universal Social Charge (USC).

Social welfare payments such as the Working Family Payment and Child Benefit are included, where relevant.

Variations can arise due to rounding.

These examples are set out in tables 2-7.


5.3 Effective tax rates There are also tables showing the average effective tax rate for different household types with employment and self-employment income for the years 2008 to 2024.

These examples are set out in tables 8-11.

5.4 Distribution of income earners for income tax purposes Information is also provided on the distribution of income earners for income tax purposes for 2024 on a pre-Budget and a post-Budget basis.
The distribution of income shows a breakdown of the number and percentage of income earners who are: ˃ exempt from income tax; ˃ paying income tax at the standard rate; and ˃ paying income tax at the higher rate.

For Budget 2024 the distribution of income earners is presented and classified in two different styles.

Table 12 is a revised presentation of the data and provides a breakdown based on the taxpayer units highest tax rate paid.
In the previous presentation, shown in Table 13 for comparison purposes, the figure for taxpayer units at the standard rate includes taxpayers whose nominal liability at the higher rate is fully covered by their tax credits, while the figure for exempt includes taxpayers whose nominal liability is fully covered by their tax credits.
5.5 Other information The data in this section complements other analyses that are undertaken aimed at integrating equality and distributional considerations into the Budget process (see Quality of Life Indicators).

In Department of Finance | Tax Policy Changes Page | 14 particular, Section 3 of that publication contains analysis of the progressivity of the income tax system, while Section 6 provides information on green budgeting.
Department of Finance | Tax Policy Changes Page | 15 INCOME LEVELS AND FAMILY TYPE – CHANGE IN TAKE-HOME PAY FOLLOWING BUDGET 2024 Table 2: Single person, no children, private sector employee taxed under PAYE, full rate PRSI contributor Gross income, € Income tax, € PRSI, € USC, € Change, € Effective tax rates, % existing min wage increase proposed existing proposed existing proposed existing proposed yearly weekly per cent existing proposed Notes: 1.
Assuming that employees currently earning less than €22,920 p.a.

earn all their income at the minimum wage and will therefore benefit from an increase in the National Minimum Wage.

2.

Variations can arise due to rounding.

3.

Percentage change is expressed as a per cent of net income.
Department of Finance | Tax Policy Changes Page | 16 Table 3: Married couple, one income, no children, private sector employee taxed under PAYE, full rate PRSI contributor Gross income, € Income tax, € PRSI, € USC, € Change, € Effective tax rates, % existing min wage increase proposed existing proposed existing proposed existing proposed yearly weekly per cent existing proposed Notes: 1.
Assuming that employees currently earning less than €22,920 p.a.

earn all their income at the minimum wage and will therefore benefit from an increase in the National Minimum Wage.

2.

Variations can arise due to rounding.

3.

Percentage change is expressed as a per cent of net income.
Department of Finance | Tax Policy Changes Page | 17 Table 4: Married couple, one income, two children, private sector employee taxed under PAYE, full rate PRSI contributor Gross income, € Income tax, € PRSI, € USC, € Working Family Payment, € Child Benefit € Change, € Effective tax rates, % existing min wage increase proposed existing proposed existing proposed existing proposed existing proposed existing proposed yearly weekly per cent existing proposed Notes: 1.
Assuming that employees currently earning less than €22,920 p.a.

earn all their income at the minimum wage and will therefore benefit from an increase in the National Minimum Wage.

2.

Variations can arise due to rounding.

3.

Percentage change is expressed as a per cent of net income.

4.

Includes the impact of the Working Family Payment where relevant (for illustrative purposes, assumes Working Family Payment applies for 52 weeks in 2024).

5.
5.

One-off Child Benefit and Working Family Payments are excluded from the analysis.
Department of Finance | Tax Policy Changes Page | 18 Table 5: Single person, no children, taxed under Schedule D (self-employed) Gross income, € Income tax, € PRSI, € USC, € Change, € Effective tax rates, % existing proposed existing proposed existing proposed yearly weekly per cent existing proposed Notes: 1.
Variations can arise due to rounding.

2.

Percentage change is expressed as a per cent of net income.
Department of Finance | Tax Policy Changes Page | 19 Table 6: Married couple, one income, no children, taxed under Schedule D (self-employed) Gross income, € Income tax, € PRSI, € USC, € Change, € Effective tax rates, % existing proposed existing proposed existing proposed yearly weekly per cent existing proposed Notes: 1.
Variations can arise due to rounding.

2.

Percentage change is expressed as a per cent of net income.
Department of Finance | Tax Policy Changes Page | 20 Table 7: Married couple, one income, two children, taxed under Schedule D (self-employed) Gross income, € Income tax, € PRSI, € USC, € Child Benefit, € Change, € Effective tax rates, % existing proposed existing proposed existing proposed existing proposed yearly weekly per cent existing proposed Notes: 1.
Variations can arise due to rounding.

2.

Percentage change is expressed as a per cent of net income.

3.

One-off Child Benefit payments are excluded from the analysis.
Department of Finance | Tax Policy Changes Page | 21 AVERAGE EFFECTIVE TAX RATES ON ANNUAL EARNINGS IN % TERMS* Table 8: Single person, full rate PRSI – effective tax rate Gross Income € 2008 2009 2009^/ 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024** Notes: ^ Supplementary Budget 2009 * Average Effective Tax Rates 2008-2010: Total of Income Tax, Levies (Income and Health) and PRSI as a proportion of gross income.
Average Effective Tax Rates 2011-2024: Total of Income Tax, PRSI and Universal Social Charge as a proportion of gross income.

Calculations only account for the standard employee credit, personal income tax credit and home carer tax credit, where relevant.

** Average Effective Tax Rates do not take account of the increase in the National Minimum Wage (NMW).

For example, the NMW increase from €11.30 per hour to €12.70 per hour from 1 Jan 2024.
Department of Finance | Tax Policy Changes Page | 22 Table 9: Married / civil partner, one income, two children, full rate PRSI – effective tax rate Gross Income € 2008 2009 2009^/ 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024** Notes: ^ Supplementary Budget 2009 * Average Effective Tax Rates 2008-2010: Total of Income Tax, Levies (Income and Health) and PRSI as a proportion of gross income.
Average Effective Tax Rates 2011-2024: Total of Income Tax, PRSI and Universal Social Charge as a proportion of gross income.

Calculations only account for the standard employee credit, personal income tax credit and home carer credit, where relevant.

** Average Effective Tax Rates do not take account of the increase in the National Minimum Wage (NMW).

For example, the NMW increase from €11.30 per hour to €12.70 per hour from 1 Jan 2024.
Department of Finance | Tax Policy Changes Page | 23 Table 10: Self-employed, single – effective tax rate Gross Income € 2008 2009 2009^/ Notes: ^ Supplementary Budget 2009 * Average Effective Tax Rates 2008-2010: Total of Income Tax, Levies (Income and Health) and PRSI as a proportion of gross income.
Average Effective Tax Rates 2011-2024: Total of Income Tax, PRSI and Universal Social Charge as a proportion of gross income.

Calculations only account for the personal income tax credit, earned income credit and home carer tax credit, where relevant.
Department of Finance | Tax Policy Changes Page | 24 Table 11: Self-employed, married / civil partner, one income, two children – effective tax rate Gross Income € 2008 2009 2009^/ Notes: ^ Supplementary Budget 2009 * Average Effective Tax Rates 2008-2010: Total of Income Tax, Levies (Income and Health) and PRSI as a proportion of gross income.
Average Effective Tax Rates 2011-2024: Total of Income Tax, PRSI and Universal Social Charge as a proportion of gross income.

Calculations only account for the personal income tax credit, earned income credit and home carer tax credit, where relevant.
Department of Finance | Tax Policy Changes Page | 25 DISTRIBUTION OF INCOME EARNERS Table 12: estimated distribution of income earners on the income tax file for 2024 Exempt Standard Rate (20%) Higher Rate (40%) Total 2024: pre-budget 251,000 2,096,300 1,077,500 3,424,800 share of total, % 7 61 31 100 2024: post-budget 251,000 2,179,800 994,000 3,424,800 share of total, % 7 64 29 100 Table 13: estimated distribution of income earners on the income tax file for 2024 Exempt (standard rate liability covered by credits or age exemption limits) Paying tax at standard rate (including those whose liability at the higher rate is fully offset by credits) Higher rate liability NOT fully offset by credits Total 2024: pre-budget 1,154,700 1,496,500 773,600 3,424,800 share of total, % 34 44 23 100 2024: post-budget 1,231,400 1,490,400 702,900 3,424,800 share of total, % 36 44 21 100 Note 1: Distributions are estimates from the Revenue tax-forecasting model for 2024 using latest actual data for the year 2021, adjusted as necessary for income and employment trends in the interim.
Note 2: Figures are provisional and likely to be revised.

Note 3: Figures are subject to rounding to the nearest hundred.

Note 4: A jointly assessed married couple/civil partnership is treated as one tax unit.

Department of Finance | Tax Policy Changes Page | 26 ILLUSTRATIVE EXAMPLES Example 1 Tom is single and working 39 hours a week on the minimum wage in the hospitality sector.
Tom will see a gain of €2,301 or 11.1 per cent in his annual net income due to this Budget and the increase in the National Minimum Wage.
Tom will also benefit from the cost of living one-off measures announced in this Budget: ˃ €150 electricity credit (December 2023) ˃ €150 electricity credit (January/February 2024) ˃ €150 electricity credit (March/April 2024) Example 1: change in annual net income due to Budget, € Gross Income Minimum wage increase New gross income Income tax liability PRSI liability USC liability Total tax liability 2023 2024 22,916 22,916 2,839 25,755 1,033 917 278 2,228 1,401 1,030 335 2,766 Net Income 20,688 22,989 Annual gain excluding cost of living one–off measures 2,301 Source: Department of Finance calculations.
Department of Finance | Tax Policy Changes Page | 27 Example 2 David is a single parent and is the primary carer of his son, Ryan aged 10.

David is employed full time as a retail store manager earning €48,000 per annum.

David will see a gain of €882 or 2.1 per cent in his annual net income due to this Budget.
David will also benefit from the cost of living one-off measures announced in this Budget: ˃ €150 electricity credit (December 2023) ˃ €150 electricity credit (January/February 2024) ˃ €150 electricity credit (March/April 2024) ˃ Additional child benefit payment of €140 (December 2023) Example 2: change in annual net income due to Budget, € Gross Income Income tax liability PRSI liability USC liability Total tax liability Child Benefit Net Income 2023 2024 48,000 48,000 5,200 1,920 1,407 8,527 4,500 1,920 1,225 7,645 1,680 1,680 41,153 42,035 Annual gain excluding cost of living one-off measures 882 Source: Department of Finance calculations.
Department of Finance | Tax Policy Changes Page | 28 Example 3 Ellie is single and has no dependents.

She is employed in the retail sector earning €45,000 per annum.

Ellie is currently renting an apartment in Dublin and pays €1,500 per month.

Ellie will see a gain of €1,017 or 2.8 per cent in her annual net income due to this Budget.
Ellie will also benefit from the cost of living one-off measures announced in this Budget: ˃ €150 electricity credit (December 2023) ˃ €150 electricity credit (January/February 2024) ˃ €150 electricity credit (March/April 2024) Example 3: change in annual net income due to Budget, € Gross Income Income tax liability PRSI liability USC liability Total tax liability Net Income 2023 2024 45,000 45,000 5,950 1,800 1,272 9,022 5,100 1,800 1,105 8,005 35,978 36,995 Annual gain excluding cost of living one-off measures 1,017 Source: Department of Finance calculations.
Department of Finance | Tax Policy Changes Page | 29 Example 4 Brian and Stephanie are married with two children, Robert aged 7 and Paul aged 4.

Paul is permanently incapacitated and Stephanie looks after Paul full-time.

Brian is self-employed and earns €120,000 per annum as an electrician.

The family will see a gain of €1,292 or 1.5 per cent in their annual net income due to this Budget.
The family will also benefit from the cost of living one-off measures announced in this Budget: ˃ €150 electricity credit (December 2023) ˃ €150 electricity credit (January/February 2024) ˃ €150 electricity credit (March/April 2024) ˃ Additional child benefit payment of €280 (December 2023) ˃ €400 one-off payment to recipients of the Carer’s Support Grant (November 2023) Example 4: change in annual net income due to Budget, € Gross Income Income tax liability PRSI liability USC liability Total tax liability Child Benefit Net Income 2023 2024 120,000 120,000 27,875 4,800 6,995 39,670 26,875 4,800 6,703 38,378 3,360 3,360 83,690 84,982 Annual gain excluding cost of living one-off measures 1,292 Source: Department of Finance calculations.
Department of Finance | Tax Policy Changes Page | 30 Example 5 Barry and Elaine are married with two children, Erin aged 7 and Sean aged 6.

Barry works in the home.

Elaine is a secondary school teacher and joined the public service in 1998 earning €67,000 per annum.

The family will see a gain of €1,102 or 2.1 per cent in their annual net income due to this Budget.
The family will also benefit from the cost of living one-off measures announced in this Budget: ˃ €150 electricity credit (December 2023) ˃ €150 electricity credit (January/February 2024) ˃ €150 electricity credit (March/April 2024) ˃ Additional child benefit payment of €280 (December 2023) Example 5: change in annual net income due to Budget, € Gross Income Pension contribution Additional Superannuation Contribution Taxable Income Income tax liability PRSI liability USC liability Total tax liability Child Benefit Net Income 2023 2024 67,000 3,389 3,285 60,326 7,305 2,680 2,262 12,247 67,000 3,346 3,285 60,369 6,523 2,680 1,985 11,188 3,360 3,360 51,439 52,541 Annual gain excluding cost of living one-off measures 1,102 Source: Department of Finance calculations.
Department of Finance | Tax Policy Changes Page | 31 Example 6 John and Patrick are married with three children, Danielle, Aisling and Ciaran who are aged 9, 7 and 5.

The family holds a medical card.

John works in the home.

Patrick works in the manufacturing sector earning €37,125 per annum.

The family will see a gain of €1,856 or 4.3 per cent in their annual net income due to this Budget.
The family will also benefit from the cost of living one-off measures announced in this Budget: ˃ €150 electricity credit (December 2023) ˃ €150 electricity credit (January/February 2024) ˃ €150 electricity credit (March/April 2024) ˃ Additional child benefit payment of €420 (December 2023) ˃ €400 Working Family Payment lump sum (November 2023) Example 6: change in annual net income due to Budget, € Gross Income Income tax liability PRSI liability USC liability Total tax liability Child Benefit Working Family Payment 2023 2024 37,125 37,125 400 1,485 562 2,447 5,040 3,952 0 1,485 562 2,047 5,040 5,408 Net Income 43,670 45,526 Annual gain excluding cost of living one-off measures 1,856 Source: Department of Finance calculations.
Department of Finance | Tax Policy Changes Page | 32 Example 7 Brendan and Sinead are married with three children, Katie, Holly and Dylan aged 14,10 and 8.

Brendan is a Garda and Sinead is a nurse.

They both joined the Public Sector in 2004.

They earn €57,000 and €52,000 per annum respectively.

The family will see a gain of €1,683 or 2.1 per cent in their annual net income due to this Budget.
The family will also benefit from the cost of living one-off measures announced in this Budget: ˃ €150 electricity credit (December 2023) ˃ €150 electricity credit (January/February 2024) ˃ €150 electricity credit (March/April 2024) ˃ Additional child benefit payment of €420 (December 2023) Example 7: change in annual net income due to Budget, € Gross Income Pension contribution Additional Superannuation Contribution Taxable Income Income tax liability PRSI liability USC liability Total tax liability Child Benefit Net Income 2023 2024 109,000 109,000 5,154 4,000 99,846 5,066 4,000 99,934 16,838 15,673 4,360 3,399 24,597 4,360 2,969 23,002 5,040 5,040 80,289 81,972 Annual gain excluding cost of living one-off measures 1,683 Source: Department of Finance calculations.
Department of Finance | Tax Policy Changes Page | 33 Example 8 Maria and Ian are married with two children, Mimi aged 8 and Clare aged 3.

Maria is employed as a project manager earning €73,000 per annum.

Ian works in the hospitality sector and earns €32,500 per annum.

The family will see a gain of €1,498 or 1.8 per cent in their annual net income due to this Budget.
The family will also benefit from the cost of living one-off measures in this Budget: ˃ €150 electricity credit (December 2023) ˃ €150 electricity credit (January/February 2024) ˃ €150 electricity credit (March/April 2024) ˃ Additional child benefit payment of €280 (December 2023) Example 8: change in annual net income due to Budget, € Gross Income Income tax liability PRSI liability USC liability Total tax liability Child Benefit Net Income 2023 2024 105,500 105,500 19,100 4,220 3,345 26,665 18,000 4,220 2,947 25,167 3,360 3,360 82,195 83,693 Annual gain excluding cost of living one-off measures 1,498 Source: Department of Finance calculations.
Department of Finance | Tax Policy Changes Page | 34 Example 9 Joe is 74 and living alone.

He has an occupational pension of €30,000 per annum and a contributory State Pension, and is in receipt of the Living Alone Allowance and the Fuel Allowance.

He will see a gain of €974 or 2.5 per cent in his annual net income due to this Budget.
Joe will also benefit from the cost of living one-off measures announced in this Budget: ˃ €150 electricity credit (December 2023) ˃ €150 electricity credit (January/February 2024) ˃ €150 electricity credit (March/April 2024) ˃ €300 lump sum fuel allowance (November 2023) ˃ €200 lump sum living alone allowance (November 2023) ˃ Additional weekly pension payment €265.30 (December 2023) ˃ Additional weekly pension payment €277.30 (January 2024) Example 9: change in annual net income due to Budget, € Occupational Pension State Pension Living Alone Allowance Gross Income Income tax liability PRSI liability USC liability Total tax liability 2023 2024 30,000 13,796 1,144 44,940 6,181 0 420 6,601 30,000 14,420 1,144 45,564 5,831 0 420 6,251 Net Income 38,339 39,313 Annual gain excluding cost of living one-off measures 974 Source: Department of Finance calculations.
Department of Finance | Tax Policy Changes Page | 35 Budget 2024 Tax Policy Changes Tithe an Rialtais, Sráid Mhuirfean Uacht, Baile Átha Cliath 2, D02 R583, Éire Government Buildings, Upper Merrion Street, Dublin 2, D02 R583, Ireland T: +353 1 676 7571 | @IRLDeptFinance www.gov.ie/ﬁnance Prepared by the Department of Finance gov.ie/budget | #Budget2024