Income Tax in Ireland, Explained
6 min read
Ireland taxes income using two rates: a standard rate and a higher rate. Where your income sits relative to your standard rate band decides how much of it is taxed at each rate — and your tax credits then reduce the bill directly.
The two rates
Every euro you earn up to your standard rate band is taxed at 20%. Everything above that band is taxed at 40%. This is why Ireland's system is described as progressive — the more you earn above your band, the higher your average rate climbs, even though no single euro is ever taxed twice.
2026 standard rate bands
| Status | Taxed at 20% up to |
|---|---|
| Single / widowed | €44,000 |
| Married, one income | €53,000 |
| Married, two incomes (combined max) | €88,000 |
For a married couple with two incomes, the band can transfer between spouses, but the increase from the one-income band is capped at the lower of €35,000 or the second earner's own income — and no individual's personal band can exceed €44,000.
Tax credits reduce the bill directly
After your income tax is calculated using the bands above, your tax credits are subtracted from that figure — not from your income. Every PAYE employee gets a Personal Tax Credit and a PAYE (Employee) Credit; the self-employed get an Earned Income Credit instead of the PAYE credit.
- Personal Tax Credit: €2,000 (single) / €4,000 (married)
- PAYE (Employee) Credit: €2,000
- Earned Income Credit (self-employed): €2,000
- Other credits may apply depending on your situation — e.g. Rent Tax Credit, Home Carer Credit, Age Tax Credit.
Worked example
Single employee earning €50,000
€44,000 × 20% = €8,800
€6,000 (the balance) × 40% = €2,400
Gross income tax = €11,200
Less Personal Credit (€2,000) and PAYE Credit (€2,000) = €7,200 net Income Tax
This is Income Tax only — USC and PRSI are calculated separately on top of this figure.
Income Tax is only one part of your deductions
Frequently asked questions
What is the standard rate cut-off point?+
It's the amount of income taxed at the lower 20% rate before the 40% higher rate applies. For 2026 it's €44,000 for a single person, €53,000 for a one-income married couple, and up to €88,000 combined for a two-income married couple.
What's the difference between a tax band and a tax credit?+
A band determines which rate (20% or 40%) applies to a slice of your income. A credit is subtracted directly from the tax you owe, euro for euro, after the band calculation.
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This calculator is provided for informational purposes only and should not be considered financial or tax advice. Figures are estimates based on published Revenue and Central Bank of Ireland rules for the 2026 tax year and may not reflect your personal circumstances. Always confirm your position with Revenue.ie or a qualified professional before making a financial decision.