THE ENTRY POINT for the higher rate of tax for PAYE workers in Ireland has been increased to €42,000 in an income tax package costing €1.3bn.
The measure was unveiled today as part of Budget 2024 by Minister for Finance Michael McGrath.
On top of this McGrath announced that the personal, Employee PAYE and earned income tax credits will all increase by €100.
A single person earning €46,000 in 2024 will see an increase of €2,000 in their net income as a result of cumulative income tax changes and USC changes since 2021, Minister McGrath said.
Changes to USC have also been announced with the 4.5% rate cut to 4% in the first reduction of USC in five years.
The entry threshold to the 4% rate has been increased to €25,760 in line with an increase to minimum wage.
The minimum wage will increase by €1.40 per hour to €12.70 per hour from January next year.
Speaking in the Dáil, McGrath said as a result of this year’s tax measures a full time worker on minimum wage will see an increase in their net take home pay of approximately €2,300 on an annual basis.
The total value of the USC changes amounts to €350mn next year.
Meanwhile, there have also been changes announced to PRSI, with contributions set to increase in October next year. PRSI will increase by 0.1%. This increase was announced today by Minister for Public Expenditure Paschal Donohoe.
“This measure, which will raise €240m in a full year, is a modest but necessary step to secure pension entitlements for this and for future generations,” he said in his Budget speech in the Dáil.
Minister McGrath also announced that the home carer tax credit and the single person child carer credit will both increase by €100. While the incapacitated child tax credit will increase by €200.
The USC concession, which applies to medical card holders and earn less than €60,000 per year is being extended for a further two years until the end of 2025.
With reporting from Cormac Fitzgerald
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