BUDGET MEASURES HAVE been announced for next year including initiatives to tackle the housing crisis and taxes on items the government thinks are bad for us. But what will today’s announcement mean for your pocket?
If your income is anything up to €20,000, here’s how you’ll be affected in the coming year.
The main change for those on lower earnings is the drop in the Universal Social Charge (USC).
Minister for Finance Paschal Donohoe announced the lower rate will be reduced from 2.5% to 2% and the ceiling for this new rate will increase from €18,772 to €19,372. Meanwhile the 5% rate will drop to 4.75%.
If you’re earning €20,000, you are currently paying USC across three rates, totalling €290.
Next year, here’s how it will play out:
This means your USC payment next year will total about €237.
The reductions will result in a €53 saving in USC for both public and private sector workers.
There will be no savings in PRSI or income tax.
Total saving: €53
A self-employed person earning around €20,000 will also benefit from the €53 USC saving detailed above.
However Donohoe also announced a €200 increase in the Earned Income Credit which will benefit 147,000 self-employed people in Ireland.
This means an extra €200 saving in income tax for these earners.
Total saving: €253
The government also announced a 5% across social welfare payments from March next year. And anyone with young children will be glad to hear the government has pledged €20 million to support a number of measures, including an extended free pre-school programme.
If you are a fan of fizzy drinks, cigarettes or sunbeds, you’ll also be paying more for those.
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