Understanding Pay Slips & Tax Calculations Ireland

Study Notes

Pay slips detail gross pay (total earnings), deductions (taxes and contributions), and net pay (amount received after deductions).
Key taxes deducted are PAYE, USC, and PRSI.
PRSI comprises employee and employer portions.
Pension contributions reduce taxable income for PAYE (with limits).
PAYE tax bands vary by marital status and income:
- Single: 20% up to €44,000, 40% above.
- Married (one income): 20% up to €53,000, 40% above.
- Married (two incomes): First spouse 20% up to €53,000, second spouse 20% up to €35,000, remaining income taxed at 40%.
PAYE tax credits include single person (€2,000), employee (€2,000), and potentially others (e.g., rent, medical).
USC tax bands are:
- €0 - €12,012: 0.5%
- €12,012 - €27,000: 2%
- €27,000 - €70,000: 3%
- Above €70,000: 4%
Employee PRSI is 4.1% on gross pay until October 1st, 2025, then rising to 4.2%.
Employer PRSI is 11.15% on gross pay, with a reduced rate of 8.9% for some employees earning less than €496 per week.
Taxable additions to gross pay include employer-paid health insurance.
Non-taxable additions include business travel, bike-to-work scheme, and professional body subscriptions paid by employers.