How much can you earn without paying tax in Ireland?

  • By: Walter Dunphy ACCA
  • Date: April 24, 2022
  • Time to read: 2 min.

In this blog post, we will look at the maximum amount on money you can earn in Ireland for both individuals and married couples/civil partnerships without paying any tax.

The three main income tax heads in Ireland are PAYE (Pay As You Earn), PRSI (Pay Related Social Insurance) and USC (Universal Social Charge).

Each of these taxes start being charged at different income levels:

Tax TypeTax Starts at €€€ (Yearly)
PAYE (Tax Credit €3,400) 20/40%€17,000
PRSI 4%€18,304 (€352 per week)
USC 0.5/2/4%€13,000

If you earn €13,000 of below in Ireland you will be zero tax on that income. Once you start making more than €13,000 you still pay 0.5% USC on amounts greater than €12,012. The bigger taxes such as PAYE do not come into effect until you start earning above €17,000.

A single person who earns €17,000 in Ireland will pay just €20 in tax.

As each of the tax heads have different rates ands bands it can be difficult to work out what your effective tax rate is. The effective tax rate is the actual tax paid as a percentage of your gross income.

For example the effective tax rate of an single person in Ireland earning €30,000 is 15%.

A single person earning minimum wage in Ireland will pay an effective tax rate of 10%.

All of the scenarios covered so far deal with the situation of single people, lets not look at the what the situation is for married couples and civil partnerships.

How much can a married couple earn before paying tax?

The biggest change in the tax status of being single and married in Ireland is that married couples can share tax credits and also transfer some of their unused PAYE tax bands with their partner.

In certain circumstance you will pay less tax when married than compared to when you were single. This is usually in situations when you have one partner earning a very high salary and another earnings a low salary.

Married/Civil Partnership with just one person working

Tax TypeTax Starts at €€€ (Yearly)
PAYE (Tax Credit €5,100) 20/40%€25,500
PRSI 4%€18,304 (€352 per week)
USC 0.5/2/4%€13,000

A married person will still start paying tax at similar levels to a single person as the PRSI and USC rules do not change. When just one partner is working they will not start paying PAYE until they earn above €25,500.

A Married/Civil Partnership with just one person working earning €25,500 will therefore still pay taxes of €1,455 ( USC €435, PRSI €1,020).

Married/Civil Partnership with both persons working

Tax TypeTax Starts at €€€ (Yearly)
PAYE (Tax Credit €6,800) 20/40%€34,000
PRSI 4%€18,304 (€352 per week) for each salary
USC 0.5/2/4%€13,000 for each salary

A married couple both earning €17,000 per annum will pay €500 each in taxes.

In all of the scenarios above, we have assumed that no other tax credits were available. But in reality there are you may be entitled to many additional tax credits for example home carer tax credit, pension contribution tax credit, tuition credit and medical expenses to name but a few.

Disclaimer: This blog post is for informational and educational purposes only and should not be construed as financial advice.

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