Budget 2023 Income Tax Changes and Take Home Pay

There were some USC and Income Tax changes announced in Budget 2023  and they took effect from January 1st 2023 .

From January 1st 2023 there was an increase of €3,200 in the income tax standard rate cut-off point for all earners, from €36,800 to €40,000 for single individuals and from €45,800 to €49,000 for married couples / civil partners with one earner.


This means that for single people – the first €40,000 of earnings will now be taxable at the lower 20 per cent rate . (It is currently €36,800).

From January 2023 – Married couples or civil partners with one earner will not enter the higher 40 per cent tax bracket until their income reaches €49,000. (Currently €45,800)

The following tax credits increased from Jan 1st 2023

  • An increase of €75 in the Personal Tax Credit from €1,700 to €1,775
  • An increase of €75 in the Employee Tax Credit from €1,700 to €1,775
  • An increase of €75 in the Earned Income Credit from €1,700 to €1,775
  • An increase of €100 in the Home Carer Tax Credit from €1,600 to €1,700

But just how much will these tax changes increase your Take Home Pay in 2023 ?

Take-home pay for a single earner will rise by a maximum of €830 a year and a maximum of €906 for a couple with one earner.


Some examples of the 2023 increases in take-home pay for various annual salaries.

Single Earners


Gross
Annual
Salary

Net Monthly
Pay 2022
Net Monthly
Pay 2023
Monthly
Increase

2023
Annual
Increase

2023
€30000€2130€2146€16€191
€35000€2428€2444€16€191
€38500€2608€2653€44€531
€40000
€2673€2742€69€830
€45000€2887€2956€69€830
€60000€3531€3600€69€830
All incomes
€40000 plus
…..…..€69€830


Couples (one earner)

Gross
Annual
Salary

Net Monthly
Pay 2022
Net Monthly
Pay 2023
Monthly
Increase

2023
Annual
Increase

2023
€35000€2570€2592€22€266
€45000 €3166€3188€22€266
€48000€3308€3367€59€706
€50000€3394€3469€75€906
€60000€3531€3600€75€906
All incomes
€49000 plus
…..…..€75€906



All single PAYE workers on €40000 or more will see a €830 annual increase in take-home pay in 2023.

(Note- Pensions and social welfare for a single person will go up by €624 a year in 2022). (€12 a week)

A single working person will have to be earning at least €39000 a year to see tax reductions annual rise in take-home pay of €631 in 2023.