May 28, 2023

How tax changes will affect your income in 2019

KILKENNY employees will benefit some a slight easing of the tax burden from today.

However, the gains will not be large, and the decision not to link changes in tax and benefit rates to expected wage growth will actually reduce average household disposable income, according to an analysis by the Economic and Social Research Institute.

Changes to tax bands, cuts in the USC and other measures, all kick in from today.

Households where a spouse cares for people in the home are the biggest winners, thanks to the increase in the home carer tax credit.

Every tax-paying worker will end up paying less from the rise of €750 in the income tax standard rate band.

This means a single earner will stay on the 20pc income tax rate until their income hits €35,300 – up from €34,550 in 2018.

Married couples will be able to earn €44,300, a rise from €43,500, before hitting the top 40pc income tax rate.

These changes to the entry point to the higher income tax rate are worth about €150 to the average worker.

Among the big winners will be families with one spouse caring in the home. The home carers’ credit rises to €1,500, in a move that will benefit 80,000 families. This means they can earn an extra €300 before they pay tax.

One spouse can work part-time and still benefit from the home carer credit, providing their income does not exceed €7,200.

Two weeks of paid parental leave will be available from next November.

Changes to the Universal Social Contribution (USC) also kick in from today.}

The USC rate of 4.75pc will drop to 4.5pc. It applies to income between €19,372 and €70,000. Most middle-income workers will gain about €90 from this USC cut.

Low-paid workers will be able to earn €19,874 before paying USC, which is up from €19,372.

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