Tax relief explained

Tax relief can benefit Irish taxpayers by reducing the part of your income you pay tax on. It could also 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.

Tax relief is a reduction in the amount of income you earn that is liable for tax. 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 other kinds are available on application via Revenue’s myAccount service.

While tax relief reduces the amount of your income that is taxed, 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, a 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.

If you’re employed, 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, which can be claimed at your highest rate of tax). 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 items needed solely for business purposes. If you’re self-employed, you can claim expenses you’ve incurred to run your business, as long as an employer has not already reimbursed you.

If you're a remote worker with a formal agreement to work from home, you may be eligible for Remote Working Relief. This allows you to claim tax relief on 30% of your qualifying electricity, heating, and broadband costs, calculated using the number of days you work from home over the year. Alternatively, your employer may pay you a tax-free allowance of up to €3.20 per day to cover these additional costs. If your employer reimburses you with this allowance, you cannot also claim Remote Working Relief for those same days.

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

You may also be eligible for tax relief on the following:

• Medical expenses, such as private healthcare

• Some housing expenses

• Third-level tuition fees

• Caregiving duties if you’re a home carer or single person child carer

• Mortgage interest on rented properties if you’re a landlord

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.

The way you claim your tax relief depends on whether you are a PAYE worker or self-employed.

You can claim tax relief for expenses made up to four years previously (e.g., you have until 31 December 2026 to claim for the 2022 tax year). 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.

If tax relief has freed up some of your income, you could make the most of your extra money by putting it to work in a savings account. From competitive fixed term deposit accounts to flexible demand deposit accounts, explore your options with Raisin.