Government proposals could mean more money in your pocket after this year’s budget 5 years ago

Government proposals could mean more money in your pocket after this year’s budget

Plans to merge the USC and PRSI are also being examined.

The upcoming budget in October will bring about some significant changes for the Irish taxpayer, with an increase in the income level at which earners become liable to the higher 40% income tax rate on the horizon.


Tax relief for self-employed people also looks highly likely to come into effect.

Published on Tuesday, the Budget 2019 tax strategy group papers report examines the income levels at which earners enter the higher income tax rate in other countries.

As illustrated in the report, Ireland's capped level of €34,550 is low in direct comparison to others.

The following table illustrates the tax rates that apply in a variety of European countries at the €34,550 level:


Income tax rates

The proposed increase would follow an existing increase in 2018, with Ministers aiming to once again benefit employees earning over the current level for entering the higher rate.

"There has been a lot of commentary around the competitiveness of the Irish income
tax regime," notes the report, "in particular the entry point to the higher rate of income tax which applies the 40% rate on incomes above €34,550.

"Although caution should be employed when conducting such a simple comparison across countries, the tables are included to facilitate discussion by the group."


Elsewhere, plans to merge the USC and PRSI remain in play.

Those terms could soon be absent from citizen's payslips if new proposals come into effect.

One such idea as noted by the report is to balance USC cuts with increased PRSI, a move that would also support the social increase fund.

The USC is a tax on income introduced in January 2011 that applies to Irish people earning a gross income in excess of €13,000 per year.


PRSI is paid by most employed people over the age of 16 in Ireland and depends on an individual’s earnings and the type of work they do.

For more information on both contributions, check out