BUDGET 2024 HAS officially been announced, with a range of one-off payments and some changes to taxes charged on income.

Minister for Finance Michael McGrath announced a number of changes to taxes this afternoon, including:

• An increase to the higher rate of tax for PAYE workers (from €40,000 to €42,000) 
• An increase in personal, Employee PAYE and earned income tax credits by €100
• A cut in the 4.5% USC rate to 4% (the entry threshold for this rate has also been increased to €25,760 in line with an increase to minimum wage)

The measures will affect people differently depending on their income. You can find out what exactly they mean for you with The Journal’s Budget Calculator.

For a person earning an annual income of €40,000, here’s a breakdown of how your tax will change.

We’ll also be bringing you examples of what it means for people earning €20,000, €60,000 and €100,000 as well as our full Budget coverage on Government spending, social welfare, and other changes.

PAYE

The changes to PAYE will only affect people earning over €40,000, as the threshold has been raised to €42,000.

If you are earning €40,000 a year, you are already only paying the lower rate of tax and so there will be no difference.

Personal tax credits and employee tax credits are increasing by €100 each. 

That means savings on PAYE for a single person earning €40,000 will amount to zero from PAYE changes and €200 from changes to credits.

PRSI

There will be a 0.1% increase in PRSI, but this will not kick in until October next year, and so it is not included in this assessment.

USC

Changes to USC have also been announced with the 4.5% rate cut to 4% in the first reduction of USC in five years. As well as this, the entry threshold to the 4% rate has been increased to €25,760 in line with an increase to minimum wage. 

So for a person earning €40,000 the amount of USC they will pay:
0.5% on the first €12,012 = €60
2% on the amount between €12,012 and €25,760 = €275
4% on the remainder up to €40,000 = €570

It gives a total annual USC payment of €905, which is €142 less than last year.

Total

Across the three taxes, the changes in this year’s Budget will bring a reduction of €342 for a single person.

For a married person, total savings will depend on whether you and your partner file your taxes together or separately and whether your household has one or two incomes.

Use The Journal’s Budget Calculator to find out what exactly the changes mean for you.