This site uses cookies to improve your experience and to provide services and advertising. By continuing to browse, you agree to the use of cookies described in our Cookies Policy. You may change your settings at any time but this may impact on the functionality of the site. To learn more see our Cookies Policy.
Dublin: 6 °C Thursday 23 January, 2020

Column: What is a ‘high earner’ in Ireland today?

We tend to think of ‘high earners’ as being those with salaries above €100,000 – but the figures reveal a different story, writes Micheál Collins.

Micheál Collins

DISCUSSION ON VARIOUS policy options and decisions by Government is often framed in the context of the income distribution and the impact on families and individuals above and below certain income thresholds. Whether it is tax increases, welfare reductions, wage changes or the new property tax, political and media comment often refers to high and low income families, those earning more than €50,000 or €100,000 etc. Unfortunately, much of this comment tends to be distant from the reality of the income distribution in Ireland – something often cited but much misunderstood.

In its most recent Quarterly Economic Observer, the Nevin Economic Research Institute (NERI) provides a new and detailed insight into Ireland’s income distribution. We do so using data from the Central Statistics Office’s Survey on Income and Living Conditions (SILC) – an annual household survey which collects data from more than 5,000 households and 12,000 individuals to provide a representative sample of Irish society.

Our analysis compiles data for both gross income (earnings, pensions, investments and welfare benefits) and disposable income (gross income minus taxes and PRSI). Both these income concepts are useful as the former captures the overall sum of income a household/individual receives and is often used for classifying them (less than €50,000 etc). The latter, disposable income, captures the amount of post-tax and transfer income households/individuals have to live off; essentially what is in their pockets to spend on all their living expenses.
Starting with households and their gross income, among the key points we highlight are:

  • 33% of households have a gross income of less than €30,000
  • 56% of households have a gross income of less than €50,000
  • 62% of households have a gross income below the average (mean) household income of €56,500
  • The top 30% of households have a gross income of more than €70,000 per annum
  • The top 20% of households have a gross income of more than €80,000 per annum
  • 14% of household have a gross income above €100,000 per annum
  • 2% of households have gross incomes above €200,000 per annum

Among individuals, the key points on the gross income distribution are:

  • Almost 300,000 individuals aged 17 years and upwards (9% of the adult population) received no income. These are mainly individuals within households such as adults on home duties, full-time students and unemployed people with no entitlement to welfare payments
  • 50% of individuals have a gross annual income of less than €18,000
  • On average individuals in the Republic of Ireland have an annual gross income of €26,800
  • 1.5 million individuals (40%) have a gross income between €10,000 and €30,000 per annum
  • 2.6 million individuals (77%) have a gross income below €50,000 per annum – this excludes those with zero incomes
  • The top 10% of individuals in the income distribution have an income of more than €60,000 per annum
  • The top 5% of individuals in the income distribution have an income of more than €78,000 per annum
  • The top 1.5% of individuals in the income distribution have an income of more than €120,000 per annum
  • The top 1% of individuals in the income distribution have an income of more than €140,000 per annum

When you factor in taxation and social insurance deductions, the disposable income picture shows a similar distribution. The average household has a disposable income of just under €46,000 and the top 10% of households have a disposable income of more than €88,000 (almost €1,700 per week). Among individuals, excluding those with zero income, there were 2 million adults with a disposable income of less than €500 per week (€26,000 per annum) and 575,000 with a disposable income of less than €200 per week (€10,400 per annum). At the top of the income distribution, the top 0.8% (25,000 individuals) have a disposable income of more than €2,000 per week (€104,000 per annum).

The data used in our analysis, and in the charts published in the NERI report, are from the 2009 CSO SILC survey. While that data represents the most robust and recently available detailed data on income in Ireland, it is true that household and individual income have changed since then. The combined effects of tax increases, welfare reductions and an increase in unemployment will undoubtedly have shifted most households to a lower income. However, the general shape of our income distribution is unlikely to have changed.

Challenging beliefs

So what does all this income data imply for public policy? While there are a myriad of implications, it is clear that our discussions around Budget time tend to overestimate the number of high income individuals and households and similarly understate the numbers on low incomes. In fact, the data challenges many of the beliefs people have as regards what it is to be receiving a high or low income. While there are no formal definitions of these concepts, the oft-cited threshold that a person is on a high income if they are above €100,000 is questionable; that is a very high income. A person is certainly ‘high income’ if they are in the top 10%; that’s €60,000 plus per annum. Of course, given lifestyle and living expenses such an income may not feel ‘high’.

Similarly, the large concentration of households on incomes between €10,000 and €50,000 – about half the nation’s households – underscores the challenges many households are facing making ends meet given recent tax and PRSI increases and welfare changes. For working households, it also points towards a much greater prevalence of low pay than many assume – a topic the NERI will publish further research on later this year.
The shape of Ireland’s income distribution also suggests that when we are looking for more income tax revenues, or changes to welfare payments (like taxing child benefit etc), that such changes have to be spread across individuals and households in a wide income range for them to generate significant revenues.

Understanding the nature, shape and composition of the income distribution is an important component of our understanding of society and the appropriateness of various policy options. Reflecting this, the NERI is developing a microeconomic model of the Republic of Ireland income distribution which will facilitate an enhanced understanding of the income distribution and the effect on it of changes to earnings, taxes, benefits and entitlements. In outlining the data above, here and in more detail in our recent report, our objective has been to highlight and make accessible information on Ireland’s income distribution. In doing so we hope to enhance broader understandings of incomes in Ireland so that current and future policy assessments can take a more detailed account of whom and how many are at different points of the distribution.

Dr Micheál Collins is Senior Research Officer at the Nevin Economic Research Institute (NERI). The NERI is a research company/think-tank on the Irish Economy launched in March 2012 and funded by a number of unions affiliated to the ICTU. The latest edition of the NERI QEO is available to download at

  • Share on Facebook
  • Email this article

About the author:

Micheál Collins

Read next: