Question 1

What is the standard rate of income tax in Ireland?

Accepted Answer

The standard rate is 20%, applied to income up to your standard rate cut-off point. Income above that cut-off is taxed at 40%. For 2026, the cut-off is €44,000 for a single person, €48,000 for a single parent, and €53,000 for a married couple with one income. A married couple where both spouses work each benefit from their own cut-off, up to €44,000 each.

Question 2

Does getting married reduce your tax in Ireland?

Accepted Answer

In many cases, yes. Under joint assessment, a married couple receives double the personal tax credit (€4,000 in 2026) and a higher combined standard rate cut-off. The benefit is greatest when incomes are unequal — a single earner household saving substantially compared to being taxed as two single individuals. Request joint assessment through Revenue myAccount.

Question 3

Do pension contributions save tax in Ireland?

Accepted Answer

Yes, pension contributions to an approved scheme (occupational pension, PRSA, or RAC) reduce your taxable income for income tax purposes at your marginal rate. A person in the 40% tax band saves €40 in tax for every €100 contributed, meaning the net cost is just €60. Age-based limits apply — ranging from 15% of earnings under age 30 up to 40% at age 60 and over, capped at €115,000 of earnings.

Question 4

Who pays USC in Ireland?

Accepted Answer

Almost everyone with Irish income pays USC. The exemption applies only if your total income is €13,000 or less. Medical card holders with income at or below €60,000 are capped at a maximum 2% rate. Self-employed people with income over €100,000 pay an additional 3% surcharge, bringing their top USC rate to 11%.

Question 5

What is the difference between effective tax rate and marginal tax rate?

Accepted Answer

The effective rate is the percentage of your total gross income that goes to all taxes (IT, USC, and PRSI combined). The marginal rate is the percentage that applies to your next euro of income. The effective rate is always lower — it averages across all your income including the lower-taxed bands. The marginal rate is what matters most for financial decisions like bonuses, pay rises, and pension contributions.

Question 6

Do self-employed people pay more tax than PAYE workers in Ireland?

Accepted Answer

The income tax rates are the same, but self-employed people do not receive the PAYE employee credit (€2,000 in 2026). Instead, they can claim the earned income credit (also €2,000), so the direct credit difference is minimal. However, self-employed people pay Class S PRSI at 4.2% on all income in 2026, subject to a minimum annual contribution of €650, and they may face the additional USC surcharge above €100,000. They also must file a self-assessed tax return annually.

Question 7

What is the Rent Tax Credit and how do I claim it?

Accepted Answer

The Rent Tax Credit (€1,000 in 2026) is available to private renters in qualifying properties. You claim it through Revenue myAccount, either in real-time during the year or by completing your end-of-year tax return (Form 12). It reduces your income tax bill directly. Tenants renting from private landlords in Ireland are eligible; rent paid to family members or for social housing does not qualify.

Irish Income Tax Calculator 2026