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.