The tax system in Ireland

Not everyone needs to file tax returns. It is also important that you are aware of the tax system to ensure that you know how to set your finances up in such a way that is most beneficial for you.

The Irish tax system

If you are working in Ireland and you are an employee, you will be in the PAYE (Pay as you earn) system. This will see your tax obligations being automatically deducted from your paycheck. For those who are self-employed, you will need to file and pay your own taxes.

If you are starting with a new employer, then you will need to provide them with a personal public service (PPS) number, as well as a completed tax credit certificate. You are able to apply for a PPS number as soon as you have received a job offer. This can be done at a PPS number centre, and you will need to produce proof of address and proof of identity.

The next step when you receive your PPS number is to register on the Revenue online platform. When you have done so, your new employer will receive a tax credit certificate which showcases what tax credits can be deducted from your tax bill. For those who are self-employed or have additional income to declare, you will have to file a self-assessment tax return.

Different types of taxes in Ireland

There are a few different types of taxes that are popular in Ireland. Your standard income tax will be levied at two tiers. You will then have the likes of capital gains taxes on all gains you have made from investing in the likes of equities when you sell your positions. There is a universal social charge (USC) and pay related social insurance (PRSI) that all earners have to pay, which contribute to social programs in the country.

Tax rates in Ireland

For the standard level of income tax, you will be paying a tax rate of 20% on your income of up to EUR33,800 for a single person. Any income over this threshold will then be taxed at a rate of 40%. The thresholds change depending on whether the person is in a marriage. There is also a higher threshold for single-parent households.

How to pay income tax in Ireland

If you are an employee at a company, your income from this employment will be automatically taken out of your paycheck. If you have any other forms of income, you will then have to file a tax return.

Self-employed people will have to file their tax returns and pay their taxes every year. This is done through the Irish Revenue’s online platform called ROS. You will calculate your own tax obligation and pay this sum, as well as a preliminary tax payment for the following year.