Income tax in Ireland explained

Income tax in Ireland applies to most types of income, including your salary, pension, and rental income. Your take-home pay depends on your tax credits, tax reliefs, and mandatory deductions such as USC and PRSI. This guide explains how income tax works for the 2026 tax year, and how it’s calculated for different situations.

The information provided here is for informational and educational purposes only and does not constitute tax advice. You should consult with a qualified tax professional or adviser regarding your individual tax situation. Tax laws and regulations are complex and subject to change, and the information provided may not be applicable to your specific circumstances. We are not liable for any tax decisions or actions you take based on this information.

Income tax (IT) is the tax you have to pay the government based on your yearly income. If you’re self-employed, you’ll pay taxes on any profit you make. This includes income from products and services that you sell online.

Most employees in Ireland pay income tax through Pay As You Earn (PAYE). Each time you receive your salary, including bonuses or overtime, any income tax due is automatically deducted along with Pay Related Social Insurance (PRSI) and Universal Social Charge (USC). The tax is then sent directly to Revenue.

Other types of income, such as business profits, pension income, or rent from property, are also taxable even though they’re not deducted through PAYE.  In these cases, you’ll usually file an annual tax return with Revenue and pay any tax due.

You might not have to pay income tax on all of your income, because tax credits and reliefs can reduce the amount of income tax you owe. Some people (for example, those aged 65+) may also qualify for an income tax exemption limit.

Income tax in Ireland is made up of two tax rate bands: 20% and 40%. The tax is calculated as a percentage of your taxable pay. This starts with your gross pay (meaning before deductions) minus any contributions you make, such as pension payments. The applicable tax rates are then applied, and tax credits (if eligible) are subtracted to determine the final tax you owe. 

The way it’s applied depends on your personal circumstances, such as whether you’re:

• Single

• Married or in a civil partnership

• Widowed or a surviving civil partner

These circumstances then determine the applicable tax band. Generally, everyone pays the standard 20% rate on the first part of their income. Only the portion above the standard rate cut-off point is taxed at the higher 40% rate. Income tax bands are designed to make paying tax as fair as possible to everyone, so higher earners pay more tax, but only in proportion to what they earn. This is called a progressive tax.

The following table sates in Ireland, which are based on how much you earn in the 2026 tax year.

Tax credits can reduce the amount of income tax you may have to pay. Revenue applies them after your income tax has been calculated. Some tax credits may have to be claimed, while others are given automatically. 

Every resident in Ireland is entitled to a Personal Tax Credit. How much you’ll get depends on whether you’re single, married or in a civil partnership, widowed or a surviving civil partner, separated or divorced. 

You may also qualify for other credits if you’re:

• A PAYE employee

• Self-employed or earning non-PAYE income

• A carer of someone at home

• A single parent

• Aged 65 or above

You can find the full list of tax credits available at Revenue.ie.

Example: A single, self-employed person could reduce their income tax by up to around €4,000 (as of 2026) if they claim both the Personal Tax Credit and the Earned Income Tax Credit, depending on eligibility and income.

If you’ve paid more tax than you owe, you may be entitled to a refund. For employees, tax credits like the Personal Credit and PAYE Credit are usually applied automatically. You might see a refund without doing anything. If you’re self-employed, have non-PAYE income, or want to claim other credits, you need to file a tax return through Revenue’s myAccount portal.

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In Ireland, there isn’t a single ‘minimum income’ for everyone — income tax depends on your tax credits and circumstances. However, if you are aged 65 or over, you may qualify for an income tax exemption limit. For the 2026 tax year, the limits are:

• Single or widowed – under €18,000 and aged 65 or older

• Married or civil partnership – under €36,000 and either partner is aged 65 or older

Income limits may be higher if you have dependent children.

These limits are applied to your gross pay, which is your total earnings before any taxes have been taken off. Your net salary is what’s left after all deductions. Only your gross pay is relevant for determining whether you exceed the minimum income threshold.

When you get paid in Ireland, income tax isn’t the only deduction. You’ll also usually pay Universal Social Charge (USC) and Pay Related Social Insurance (PRSI). Any exemptions or tax credits only reduce income tax. So even if someone’s income is below the exemption limit, they might still have to pay a small amount of USC or PRSI. 

USC is calculated on your gross income, and employee pension contributions do not reduce USC. PRSI is usually paid on most earnings, although if you are aged 66 or over, whether you pay PRSI can depend on your circumstances (including whether you have been awarded the State Pension (Contributory)).

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