Employees pay income tax through the Irish PAYE (Pay As You Earn) system. The PAYE system means that your employer deducts the tax that you owe directly from your wages prior to paying you. Your employer gives this tax directly to the Revenue Commissioners. The Revenue Commissioners, also known as Revenue, are the government body who assess and collect taxes and duties in Ireland.
Nearly all income is liable to tax. Tax is charged as a percentage of your income. The percentage that you pay depends on the amount of your income. The first part of your income, up to a certain amount, is taxed at 20%. This is known as the standard rate of tax and the amount that it applies to is known as the standard rate tax band.
The remainder of your income is taxed at the higher rate of tax, 40% in 2021.
The amount that you can earn before you start to pay the higher rate of tax is known as your standard rate cut-off point.
More detailed information about how your tax is calculated can be found here.
As soon as you arrive in Ireland you should apply for your Personal Public Service (PPS) Number.
A Personal Public Service (PPS) number is a unique number that government bodies use to identify you. You will need to give this number to your employer as soon as possible so that they can advise the Revenue Commissioners for your tax deductions. You may also need it when setting up a bank account or accessing public services.
Information on how to apply for a PPS number is available here.
N.B. You cannot apply for a PPS number before you arrive in Ireland. You must be living in Ireland in order to apply.
When a child is born in Ireland, they are given a PPS number when their birth is registered with the General Register Office. In this case, they do not need to apply for one. However, if both parents live outside of the state, this will not automatically occur, and you will still need to apply for one.
For children living in, but not born in Ireland the parent/guardian must apply for one. However, the parent/guardian must already have their own PPS number in order for the child to be registered and linked with them.
Tax credits reduce the amount of income tax that you are required to pay. The tax credits you receive are dependent on your personal circumstances, for example, the single person tax credit and married person’s tax credits.
Further information on tax credits can be found on Revenue.
Employers as well as employees over 16 years of age and under 66 pay compulsory contributions to Ireland’s Social Insurance Fund. Social insurance contributions are divided into different categories, known as classes or rates of contribution. The class and rate of contribution you pay is determined by the nature of your work.
The USC is a tax on your income. It is charged on your gross income. You cannot use tax credits or tax relief to reduce the amount you must pay.
You pay the USC if your gross income is more than €13,000 per year. Once your income is over this limit, you pay the relevant rate of USC on all of your income.
More information in USC and the different rates can be found here.
Child Benefit is a monthly payment of €140 to support parents and guardians. It is paid for each child who:
normally lives with you and is being fully supported by you
is under 16, or under 18 if in full-time education, full-time training or has a disability and cannot support themselves
Child Benefit is not paid on behalf of children 18 or older, even if they stay in education or training.
You need to apply for Child Benefit within 12 months of: