Tax relief explained

Tax relief can benefit Irish taxpayers as it reduces the part of your income you pay tax on and could allow you to claim back tax you’ve already paid to the government, potentially providing you with a lump sum. On this page, you’ll learn everything you need to know about Irish tax relief, how it works, what you can claim tax relief on, and how you claim it.

The information provided here is for informational and educational purposes only and does not constitute financial advice. Please consult with a licensed financial adviser or professional before making any financial decisions. Your financial situation is unique, and the information provided may not be suitable for your specific circumstances. We are not liable for any financial decisions or actions you take based on this information.

‘Tax relief’ is a reduction of the income on which you pay tax to the government. It is sometimes referred to as a tax allowance or deduction. You can get tax relief in a few ways, including tax on your income, tax rebates on business expenses, older people’s tax relief, medical tax relief, pension tax relief, and working from home tax relief. Some tax relief is automatic, while others you’ll need to apply for.

While tax relief reduces the amount of your income on which you pay tax, tax credits reduce the amount of tax that you actually have to pay. With tax relief, the amount you receive is usually determined by the rate of income tax you pay, but Revenue deducts it before your tax is calculated. In contrast, tax credit is a specific euro amount that makes the tax bill smaller for certain groups of people.

Common tax credits in Ireland include the employee tax credit and home carer tax credit, which some people qualify for based on their personal circumstances. Plus, everyone is entitled to a personal tax credit that varies depending on whether they are a single person, married or in a civil partnership, or widowed or a surviving civil partner.

Certain payments, such as gifting money to someone, paying a loan, or paying into a pension, can be made without having to pay tax. For example, income tax is deducted directly and automatically from your salary by your employer.

Alternatively, if you’re self-employed or receive income from another source, you can claim tax back from Revenue. To do this, you’ll need to complete a self-assessment tax return so that they can determine your level of tax relief.

Irish tax relief is based on your income tax band, which is 20% or 40%. In some cases, however, it is limited to the standard 20% rate. Tax relief on medical expenses, for example, is always calculated at 20% (with the exception of nursing home expenses). Say you’re a parent and you’ve paid €200 for prescriptions for your children. Provided they were prescribed by a doctor, you could get a maximum of €40 back (€200 x 20%).

One way that you’re eligible to claim tax relief is if you use your own money to purchase things needed solely for business purposes. If you’re self-employed, you can make claims on expenses you’ve incurred to run your business, but you cannot claim tax relief if your employer pays for your expenses.

You can also claim tax relief if your employer has asked you to work from home. You won’t be able to claim this if your decision to work from home was voluntary.

Furthermore, you receive tax relief as an older person, based on the income tax bracket you’re in. It’s worth looking into your pension documents to check whether you need to do this yourself or whether your pension provider does it for you. 

You’re also entitled to tax relief on the following:

• Medical expenses, such as private healthcare

• Some housing expenses

• Third-level tuition fees

• If you’re a home carer or single person child carer

• If you’re a landlord, you may be eligible for tax relief on mortgage interest for rented properties

You might be eligible to claim tax relief on the following things:

• Uniforms and tools: Cleaning, repairing, and replacements of uniforms, and repairing or replacing tools you need for your job. This can be anything from a pair of scissors to electric machinery.
• Vehicles: If you use a vehicle for work, you may be able to claim tax relief. However, how much you can claim will depend on the vehicle and whether you own or lease it, or whether it’s a company vehicle. And if you’re just driving to and from your workplace as part of your regular commute, you can’t claim tax relief on those travel costs.
• Travel and overnight expenses: You can claim tax relief on travel and overnight expenses for your work. This includes transport costs, accommodation, food and drink.
• Professional fees and subscriptions: If you’re required by your company to subscribe to approved organisations, you may be eligible for tax relief.
• Working from home: You can claim income tax relief if your company has asked you to work from home. Tax relief can be applied to extra bills you may need to pay, such as heating, electricity, and internet.
• Buying other equipment: Some equipment you need for work, such as a computer, is eligible for tax relief.

For a full list of the flat-rate expenses available to different employee groups, see Revenue’s list of Flat Rate Expense Allowances (pdf).

You might have heard the term “tax write-off”, which is relevant for companies and self-employed individuals, as it involves claiming tax relief on certain company costs. This might be everyday expenses, such as paying employees or the rent for your office or place of work. You can also claim for administrative costs, such as accountancy fees or the interest on a loan you took out to set up your business. The key requirement is that the expense has to be purely for business use, and properly recorded when you file your income tax return.

If you file a self-assessment tax return with Revenue, you can make tax relief claims for expenses during this process. You can also check your eligibility and claim tax relief through the Irish government website. Revenue’s myAccount service makes it quick and easy to apply for tax reliefs.

You can claim tax relief for expenses made up to four years previously. To make the claim, you must have records of what you’ve spent. If you’re claiming for the current tax year, Revenue will make the adjustments based on your tax code. For claims on previous years, they will either make adjustments or give you a tax refund.

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