page_title: Taxation in the Republic of Ireland
section_title: Income tax (PAYE and PRSI)
hierarchical_section_title: Taxation in the Republic of Ireland / Structure of Irish tax revenues / International comparisons / Income tax (PAYE and PRSI)
caption_attribution_description: English: Replication of the OECD's 2015 Personal Taxation Progressivity Ratio (e.g. Employment tax at 167% of average wage vs. 67% of average wage)
context_page_description: Taxation in the Republic of Ireland in 2017 came from Personal Income taxes, and Consumption taxes, being VAT and Excise and Customs duties. Corporation taxes represents most of the balance, but Ireland's Corporate Tax System is a central part of Ireland's economic model. Ireland summarises its taxation policy using the OECD's Hierarchy of Taxes pyramid, which emphasises high corporate tax rates as the most harmful types of taxes where economic growth is the objective. The balance of Ireland's taxes are Property taxes and Capital taxes.
  An issue in comparing the Irish tax system to other economies is adjusting for the artificial inflation of Irish GDP by the base erosion and profit shifting tools of U.S. multinationals in Ireland. In 2017, the Central Bank of Ireland replaced Irish GDP with Irish GNI* to remove the distortion; 2017 GDP was 162% of 2017 GNI*. Properly adjusted, Ireland's Total Gross Tax-to-GNI* ratio of 36% is in-line with the EU–28 average, and above the OECD average; Ireland's Exchequer Tax-to-GNI* ratio of 28%, is in line with the EU–28 average, and the OECD average.
context_section_description: The OECD's 2018 Taxing Wages shows Ireland's tax wedge for labour income, which is the total tax (PAYE and EE and ER–PRSI less SS Benefits) paid on Irish wages by both the employee and employer, as a % of the total cost of labour to the employer (PAYE and ER–PRSI), is one of the lowest in the OECD. Of the 35 OCED members in 2017, the average Irish single-worker cost 27.2% in taxes versus the OECD average of 35.9% (ranked 29th–lowest), and the average Irish married worker cost 10.8% in taxes versus the OECD average of 26.1% (ranked 31st–lowest).
  The OECD's 2018 Taxing Wages shows Ireland's employee tax on wages, which is the total tax (PAYE and EE–PRSI less SS Benefits) paid by Irish employees, as a % of their gross wages, is also one of the lowest in the OECD.  Of the 35 OCED members in 2017, the average Irish single-worker paid 19.4% versus the OECD average of 25.5% (ranked 28th–lowest), and the average Irish married worker paid 1.2% versus the OECD average of 14.0% (ranked 33rd–lowest).
  In relation to the single-worker, the OECD noted that a driver of the lower Irish rate is that EE–PRSI (or employee social security contributions) are lower in Ireland versus the OECD average.  PAYE and ER–PRSI accounted for 87% of the Irish tax wedge for labour income, whereas for the OECD average it was 77%.  In relation to the married-worker, the OECD noted the additional effect of Irish child benefit and provisions which reduced the married-worker employee tax by 16.4%, whereas for the OECD average it was 9.8%.  Ireland's lower EE–PRSI, and higher child benefits, have been noted in other studies.
  Aside from lower employee social security levies (e.g. EE–PRSI), the most distinctive aspect of Ireland's personal tax system is the level of Progressivity, as defined by the ratio of the employee tax (or tax wedge for income) at 167% of the average wage, to employee tax at 67% of the average wage.  In October 2013, the Department of Finance Tax Policy Group, highlighted that Ireland has the most progressive personal tax system in the OECD. By September 2016, the Irish Tax Institute showed that Ireland was the 2nd most progressive personal tax system in the OECD.
  The progressive nature of Ireland's personal tax system is also apparent in the distribution of Irish personal tax.  In October 2013, the Department of Finance Tax Policy Group, highlighted the following personal tax (PAYE and EE–PRSI), statistics from the Irish Revenue Commissioners for the 2012 tax year:
  Top 1% of earners, earned over €200,000 in income and paid 20% of personal tax.
  Top 5% of earners, earned over €100,000 in income and paid 40% of personal tax.
  Top 23% of earners, earned earn over €50,000 in income and paid 77% of personal tax.
  Bottom 77% of earners, earned less than €50,000 in income and paid 23% of personal tax.
  The above format of the Tax Policy Group has never been reproduced, in April 2018, the OECD and the Irish Revenue Commissioners disclosed that in 2015:
  Top 1% of earners, earned over €203,389 in income and paid 19% of personal tax.
  Top 10% of earners, earned over €77,530 in income and paid 61% of personal tax.
caption: OECD 2015 Progressivity Ratio: Employment tax rate at 167% average wage vs. 67% average wage.[9]
exif: {}