There were some USC and Income Tax changes announced in Budget 2025 and they came into effect from January 1st 2025 .
From January 1st 2025 there was an increase of €2000 in the income tax standard rate cut-off point for all earners, from €42,000 to €44,000 for single individuals and from €51,000 to €53,000 for married couples / civil partners with one earner.
This means that for single people – the first €44,000 of earnings are now taxable at the lower 20 per cent rate . (It was previously €42000).
From January 2025 – Married couples or civil partners with one earner will not enter the higher 40 per cent tax bracket until their income reaches €53,000. (Was 51,000)
The following tax credits increased from Jan 1st 2025
- An increase of €125 in the Personal Tax Credit from €1,875 to €2000
- An increase of €125 in the Employee Tax Credit from €1,875 to €2000
- An increase of €125 in the Earned Income Credit from €1,975 to €2000
- An increase of €150 in the Home Carer Tax Credit from €1,800 to €1,950
USC Changes 2025
From Jan 1st 2025 the ceiling for the 2% rate of USC rose by €1622 to €27,382.
The 4% rate of USC was cut to 3.0%. . This rate applies to income between €27,382 and €70,044
But just how much will these tax and USC changes increase your Take Home Pay in 2025 ?
Calculation examples of the 2025 changes to take-home pay for various annual salaries.
Single Earners
| Gross Annual Salary | Net Pay 2024 | Net Pay 2025 | Annual Increase 2025 |
| €30000 | €26040 | €26319 | €279 |
| €35000 | €29636 | €29960 | €324 |
| €50000 | €38832 | €39691 | €859 |
| €65000 | €46629 | €47623 | €994 |
€75000 | €51628 | €52662 | €1034 |
| €100000 | €63662 | €64671 | €1009 |
Couples (one earner)
| Gross Annual Salary | Net Pay 2024 | Net Pay 2025 | Annual Increase 2025 |
| €45000 | €38709 | €39248 | €539 |
| €75000 | €55303 | €56462 | €1159 |
€100000 | €67297 | €68431 | €1134 |
A single PAYE worker on €50000 will see a €859 annual increase in take-home pay in 2025.
(Note- Pensions and social welfare for a single person will go up by €624 a year in 2025). (€12 a week)