[Ireland] 2022 tax changes and how they will affect pay

The turning of the year is bringing changes to law and taxes in Ireland as the framework announced in the Budget takes effect, Irish Mirror reports.

Workers across the country might see slight changes to their take-home pay as the new mid-range USC rate of 2 per cent will now apply to a more significant portion of income.

It means employees will take home a slightly bigger sum each year, an additional €15.20.

The lower rate 20 per cent tax band is now extended by €1,500 per annum, meaning people earning more than €36,800 per year will see a tax saving of €300.

The self-employed may not see this change until 2023, after filing their income tax return for this year.

PAYE workers earning more than €36,800 who pay tax as they earn throughout the year will see a reduction in those payments as they are paid throughout the year.

In the situation of a two-income joint assessed couple, where one person is earning on the lower tax band, and one on the higher; an increased band of €45,800 will now reportedly apply.

Tax credits such as the PAYE, Earned Income Credit, and Personal Credits have all increased by €50 per annum.

The percentage of expenses that can be claimed by employees working from home has also increased. Remote workers can now claim up to 30 per cent of relevant expenses.

The Finance Act also includes a new provision allowing a director or employee to receive a medical check-up tax-free, where qualifying medical check-ups are generally made available to all company directors and employees.

A new section introduced into the legislation will also allow a company to pay certain medical expenses of directors and employees without a charge to Benefit in Kind.

The weekly income threshold for the higher rate of employer’s PRSI has increased from €398 to €410. The change was made to ensure there is no incentive to reduce working hours for a full-time employee on the increased minimum wage. The national minimum hourly rate is now €10.50, up from €10.20 per hour.

The turning of the year is bringing changes to law and taxes in Ireland as the framework announced in the Budget takes effect, Irish Mirror reports.

Workers across the country might see slight changes to their take-home pay as the new mid-range USC rate of 2 per cent will now apply to a more significant portion of income.

It means employees will take home a slightly bigger sum each year, an additional €15.20.

The lower rate 20 per cent tax band is now extended by €1,500 per annum, meaning people earning more than €36,800 per year will see a tax saving of €300.

The self-employed may not see this change until 2023, after filing their income tax return for this year.

PAYE workers earning more than €36,800 who pay tax as they earn throughout the year will see a reduction in those payments as they are paid throughout the year.

In the situation of a two-income joint assessed couple, where one person is earning on the lower tax band, and one on the higher; an increased band of €45,800 will now reportedly apply.

Tax credits such as the PAYE, Earned Income Credit, and Personal Credits have all increased by €50 per annum.

The percentage of expenses that can be claimed by employees working from home has also increased. Remote workers can now claim up to 30 per cent of relevant expenses.

The Finance Act also includes a new provision allowing a director or employee to receive a medical check-up tax-free, where qualifying medical check-ups are generally made available to all company directors and employees.

A new section introduced into the legislation will also allow a company to pay certain medical expenses of directors and employees without a charge to Benefit in Kind.

The weekly income threshold for the higher rate of employer’s PRSI has increased from €398 to €410. The change was made to ensure there is no incentive to reduce working hours for a full-time employee on the increased minimum wage. The national minimum hourly rate is now €10.50, up from €10.20 per hour.