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What will Budget 2019 mean for those earning around €50,000?

There will be some modest savings for earners next year.

Image: Shutterstock

MINISTER FOR FINANCE Paschal Donohoe has announced Budget measures for next year, including increased spending on housing, childcare, and the gardaí.

But what impact will today’s announcement have on your pocket?

If your income is anything up to €50,000, here’s how you’ll be affected in the coming year.

Public and private sector staff

The main change for those on middle income 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 also announced that the second rate of the USC will be increased from €19,372 to €19,874.

So if you’re earning €50,000, you are currently paying USC across three rates, totalling €1,662.

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 €50,000 = €1355.67

This means your USC payment next year will total about €1,573.

The reductions will result in an €89 saving in USC for both public and private sector workers.

An increase of €750 in the income tax standard rate band for all earners was also announced.

A rise from €34,550 to €35,300 will apply to single individuals and from €43,550 to €44,300 for married one-earner couples, saving earners €150.

Total saving: €239.

Self-employed workers

A self-employed person earning around €50,000 will also benefit from the €89 USC saving above.

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

This means an extra €200 saving in income tax for these earners.

Total saving: €289

Other

The government announced a €5 increase in all social welfare payments from March next year, including parents who will see a rise in 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.

And smokers will 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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