Know Your Rights: Income tax bands and rates

Question

I’m a PAYE worker. What income tax will I pay in 2018?

Answer (December 2017)

Changes to income tax bands were announced as part of Budget 2018. The amount of tax that you have to pay depends on your personal circumstances.

Tax is charged as a percentage of your income. The percentage that you pay depends on the amount of your income.

The first part of your income, up to a certain amount, is taxed at 20%. This is known as the standard rate of tax and the amount that it applies to is known as the standard rate tax band.

The remainder of your income is taxed at the higher rate of tax, which is 40%. The amount that you can earn before you start to pay the higher rate of tax is known as your standard rate cut-off point.

For 2018 the standard rate of tax remains at 20%, but the standard rate tax bands have been increased as follows:

2018 € 2017 €
Single person 34,550 @ 20%

Balance @ 40%

33,800 @ 20%

Balance @ 40%

Married couple/civil partners, one income 43,550 @ 20%

Balance @ 40%

42,800 @ 20%

Balance @ 40%

Married couple/civil partners, two incomes Up to 69,100 @ 20%

Balance @ 40%

Up to 67,600 @ 20%

Balance @ 40%

One-parent family 38,550 @ 20%

Balance @ 40%

37,800 @ 20%

Balance @ 40%

There is a range of income tax reliefs available, which can reduce the amount of tax that you have to pay.