The tax changes you'll notice in your payslip thanks to Budget 2023

The changes announced in Budget 2023 are beginning to take effect over the coming months, from tax cuts, wage boosts and social welfare increases.

The government has been working to curb the worst effects of the current cost of living crisis as energy bills, groceries, and other household essentials skyrocket in price.

Those in receipt of social welfare payments will be in for a boost between now and the end of the year - but so too are those who are not receiving government support.

READ MORE: Every tax break you could be claiming if you are still working from home

Employees across Ireland will benefit from changes to PAYE and USC changes that were announced.

So, if you’re wondering what that might mean for you, here is a breakdown of what is changing ahead of payday.

PAYE

The key change made to PAYE in this year’s Budget is that the entry point for the higher tax band rate has been increased by €3,200.

This means that a smaller proportion of your income will be subjected to the higher tax rate.

As well as this, personal tax credits and employee tax credits are increasing by €75 each, bringing both to €1,775.

For a single person earning around €60,000, these changes mean income tax will decrease from €13,240 to €12,450.

It may not seem like a lot, but this means savings on PAYE for a single person earning €60,000 of €790.

USC

There were some small adjustments being made to the USC post-budget to account for the changes in the minimum wage.

The ceiling of the second USC rate band is increasing from €21,295 to €22,920.

This means that USC tax on an income of €60,000 would be charged as follows:

• 0.5% on the first €12,012 = €60
• 2% on the amount between €12,012 and €22,920 = €218
• 4.5% on the remainder up to €60,000 = €1,669
• It gives a total annual USC payment of €1,947, a saving of around €40 compared to 2022.

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