Taxes in Ireland

Written by Lais Cattassini Moderated by Oleksandra Dosii

Lais Cattassini

Lais is a Brazilian journalist and copywriter with over 17 years of experience, writing about things she knows really well (travelling, cinema, social media trends) and things she loves learning about.

Oleksandra Dosii

Oleksandra is a dedicated marketer with a passion for growing HR-tech products. She believes content marketing is about delivering high-quality content that provides value—not just generating leads. Since 2016, Oleksandra has been involved in tech talent relocation.

Last update: September 16, 2024

Next update: Scheduled for February 1, 2025

Ireland's tax system is primarily based on a progressive income tax model, meaning that tax rates increase as income levels rise. A standard rate of 20% applies to earnings up to a specified threshold. For 2024, this threshold is €42,000 for a single person. Income above the standard rate threshold is taxed at 40%.

In addition to income tax, the Universal Social Charge is applied to gross income above €13,000 at varying rates, with higher rates for self-employed individuals earning more than €100,000. Employees and employers must also contribute to PRSI, which funds social welfare benefits.

What is the income tax in Ireland?

Ireland has two income tax rates. The first one is the standard rate of 20%, which applies to income up to a specific threshold, which depends on your circumstances. For a single person, the threshold in 2024 is €42,000. For married couples with two incomes, €84,000. The second income tax rate is 40% for any income over the threshold.

Here is a more detailed description of tax rates:

Universal Social Charge (USC)

In Ireland, alongside the income tax, individuals must also pay the Universal Social Charge (USC), a progressive tax applied at different rates depending on income levels. Everyone with income above a certain threshold must pay USC, with the exception of some exemptions based on low income, age, or specific types of income.

In 2024, if your total income exceeds €13,000 per year, you must pay USC at the following rates:

The USC is primarily a revenue-raising measure used by the government to fund general state services, such as public healthcare, infrastructure, and education.

Social Security contributions

Pay Related Social Insurance (PRSI) is a social insurance system that helps fund various state benefits and entitlements, and it is different from USC. The amount of PRSI you pay depends on your employment status (whether you’re employed, self-employed, or non-employed) and your level of income.

Both USC and PRSI are deducted from your income but serve different purposes. The USC is a tax that helps fund the government’s general expenditure, while PRSI is specifically designed to fund social welfare benefits.

Employees pay 4.1% of their gross earnings (before tax and after pension contributions) in PRSI if they earn more than €5,000 per year.

Employers are also required to pay PRSI on behalf of their employees. The employer's contribution rate varies depending on the employee's earnings. Self-employed individuals, including professionals and sole traders, pay 4.1% PRSI on their annual income, with a minimum annual contribution of €500.

The PRSI system finances a wide range of social welfare payments and benefits, including state pension, jobseeker’s benefit, maternity and paternity benefits, and invalidity pension.

Online tax calculator for taxes in Ireland

To calculate taxes in Ireland, you must consider your income tax, the Universal Social Charge (USC), and Pay Related Social Insurance (PRSI).

Your gross income includes salary, bonuses, rental income, and any other taxable income. Certain sources of income, such as social welfare payments or tax-free allowances, are not included.

You can calculate your net income here.

Annual tax returns in Ireland

Not everyone in Ireland is required to file an annual tax return. It mainly applies to self-employed individuals, Pay As You Earn (PAYE) workers with additional income, people who pay Capital Gains Tax, and people claiming tax reliefs or refunds.

If you are self-employed or have additional income, you will need to file a Form 11. This form reports all types of income, including self-employment income, rental income, investment income, and any foreign income.

PAYE employees who have additional income (such as from rental properties or investments) can file a Form 12. This form allows them to declare this income and claim any tax credits or reliefs they may be entitled to.

The tax year in Ireland runs from January 1 to December 31 and returns must be filed by October 31 of the following year. If you file your return online through Revenue’s Online Service (ROS), the deadline is usually extended to mid-November.

To file your tax return, you’ll need details of income from your employer. Self-employed individuals will need details of their business income and expenses. It is also important to present details of any tax credits, reliefs, or expenses you're entitled to claim. PRSI and USC contributions will usually be deducted automatically, but you may need to report these as part of your return if self-employed. If you've sold assets such as property or shares, you'll also need to report capital gains or losses.

Self-employed individuals must pay preliminary tax for the upcoming tax year. Preliminary tax is an estimate of the tax you expect to owe for the next year, and it must be paid by the tax return deadline (October 31).

How to pay less taxes

Tax credits

Tax credits directly reduce the amount of tax you owe in Ireland, unlike deductions that reduce your taxable income.

Deductions

Certain expenses can be deducted from your income, reducing the amount of taxable income.

It is possible to deduct pension contributions, medical expenses, tuition fees, rent tax credit, and flat rate expenses.

Tax reliefs

Tax reliefs are specific reductions in your taxable income or tax liability. Some useful reliefs include charitable donations and home renovation incentive.

Talk to a tax advisor

For those with more complex tax situations, especially expats with international income, it may be beneficial to consult a tax advisor or accountant. These services ensure you pay correctly and can help collect benefits, allowances, and deductions. For expats, services like these can be even more beneficial, as they help foreigners overcome language barriers and the complicated tax regulations of a new country.

Other Irish taxes

Individuals and businesses in Ireland may encounter several taxes other than income tax.

Value added Tax (VAT)

VAT is a consumption tax levied on the sale of goods and services. In Ireland, the standard rate is 23% and applies to most goods and services. Reduced rates of 13.5% and 9% apply to certain goods and services.

Businesses collect VAT on their sales and pay VAT on their purchases. They then remit the difference to the Revenue Commissioners. VAT is typically included in the price of goods and services purchased by consumers.

Corporation tax

Corporation tax is a tax on the profits of companies and other business entities. A 12.5% rate applies to trading income (e.g., income from the sale of goods and services) and a 25% rate applies to non-trading income (e.g., investment income, rental income).

Companies calculate their taxable profits and pay corporation tax on those profits. Certain sectors, like the pharmaceutical and technology industries, benefit from lower rates under specific regimes.

Capital gains tax (CGT)

Capital gains tax is charged on the profit from the sale of assets such as property, stocks, or business assets. The standard rate of CGT is 33%.

Inheritance tax (Capital acquisitions tax)

This 33% tax is on the value of assets received as a gift or inheritance.

Local property tax (LPT)

Local property tax is a tax on the market value of residential property, with rates ranging from €90 for properties valued up to €200,000 to €405 for those valued between €350,001 and €437,500, and local authorities can adjust rates by up to 15%

Property owners must self-assess the value of their property and pay the tax based on the value band in which their property falls. LPT is used to fund local services and infrastructure.

Tax treaties with Ireland

Ireland has treaties with 76 countries to avoid double taxation in regards to income tax, universal social charge, corporation tax, and capital gains tax. You can find more information about these treaties here.