in your pocket

What Budget 2019 means for someone earning around €20,000

Thanks to changes to the Universal Social Charge, there will be some modest savings next year.

MOST OF WHAT was contained in today’s budget was already well-flagged, but now that Minister Paschal Donohoe’s speech is done and dusted, we can take a look at what it all means for you.

If you’ve been earning in or around €20,000 here’s how things will stack up for you over the coming year.

Private and public sector staff

The main change for those on lower earnings is the drop in the Universal Social Charge (USC). These changes will apply from 1 January 2019. 

Minister for Finance Paschal Donohoe announced the third rate of USC will be reduced from 4.75% to 4.5% “to give a further targeted benefit to low- and middle-level incomes”. 

Donohoe announced the second rate of the USC will be increased from €19,372 to €19,874. 

He said that this is being implemented “in order to ensure that the salary of a full-time worker on the minimum wage will remain outside the top rates of the USC”. 

If you’re earning €20,000, you are currently paying USC across three rates, totalling €237.

Next year, here’s how it will play out:

  • 0.5% on the first €12,012 = €60.06
  • 2% on up to €19,874 = €157.24
  • 4.5% on the remaining up to €20,000 = €5.67

The reductions will result in a €14 saving in USC for both public and private sector workers.

The weekly threshold for the higher rate of employer’s PRSI will also be increased from €376 to €386 “to ensure that there is no incentive to reduce working hours for a full-time minimum wage worker”. 

An increase in the hourly minimum wage was also announced. 

Effective from 1 January 2019, it will be increased to €9.80.

Income tax

Here’s some good news.

A self-employed person earning around €20,000 will also benefit from the €14 USC saving detailed above.

Self-employed people have been given a €200 increase in Earned Income Credit, which Donohoe said would affect around 150,000 workers.


There are other measures contained within the Budget that may be relevant to you. 

The government announced a €5 in all social welfare payments from March next year, including parents who will see increases to Child Benefit payments.

Parents will also receive two extra weeks’ paid leave for the first year after their children are born, on top of maternity and paternity leave options already in place.

However, a 50% increase in VAT for the hospitality sector means you’ll probably be paying more for haircuts and meals out.

Smokers will also pay more for cigarettes, while there will also be a 1% surcharge for diesel vehicles to apply across all VRT bands.

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