The new Income levy rates from May 1st 2009 are as follows: (As per April Budget)
- 2% on income up to €75,036
- 4% on income from €75,037 to €174,980
- 6% on income above €174,980
If your income is 180000 – you do not pay 6% on all your income – you will pay 6% on the portion over €174980 , 2% on the first €75036, and 4% on the next €99943.
If your income is greater than the minimum threshold of €15,028 per year or €289 per week, you pay the levy on the full amount of your income.
(If you are aged 65 or over the minimum threshold is €20,000 per year for a single person and €40,000 per year for a couple).
If you are a PAYE worker – your employer will calculate the income levy at each payslip – on a week by week or month by month basis. If your income varies from week to week you could pay the income levy in certain weeks/months even if your total annual income is under the threshold. In this kind of situation your employer should make an adjustment at the end of the year and refund all income levy deducted from your wages.
If you have not worked with the same employer continuously throughout the year Revenue will deal with any refund of income levy due at the end of the year.
Example 2
From 1 May 2009 the income levy is calculated on a weekly threshold of 2% for income up to €1443, 4% on income from €1443 to €4810, and 6% on anything over €4810.
If you get a payment for one week in excess of €3,365 you will pay the income levy at the 3% on the balance.
If your yearly income means you are liable at a lower rate, you will have overpaid the income levy. In this situation your employer should make an adjustment at the end of the year (week 52) and make the appropriate refund. If you have not worked with the same employer continuously throughout the year Revenue will deal with any refund of income levy due at the end of the year.