Single people can face ‘seven times more tax’
Single people pay as much as seven times more tax as married couples and hundreds more for their car insurance.
Furthermore, a highly paid single person could pay as much as €12,000 more tax a year as a married couple on the same income, according to new figures from Ernst & Young (EY). It examined the total amount of tax paid by single individuals and married couples on equivalent pay packets.
A single person earning €35,300 – which is below the average Irish wage – would pay about €6,100 in taxes on that salary.
However, a married couple where both spouses work and earn €35,300 between them would pay only €806 in taxes, according to EY.
This means the single person would take home €29,232 of their salary after paying tax, while the married couple would take home about €34,500.
A single person earning €100,000 will lose about €38,500 of his salary to tax.
However, a married couple where both spouses work and earn €100,000 between them would pay about €26,400 in tax – around €12,000 less tax than the singleton, according to EY.
The figures highlight the unfairness of Irish income tax for single people, as well as for unmarried couples.
Single people also face crippling tax bills when inheriting property and other gifts, while their married counterparts pay little if any tax.
“The Irish tax system favours married couples over single or cohabiting couples,” said Michael Rooney, tax partner with EY.
“The tax system has not kept pace with the increase in couples who choose to live together rather than get married, and they are unfairly treated by the tax system. These anomalies in the Irish tax rules have meant that inventive and perfectly legal arrangements have arisen in recent years, where two platonic male friends married so they could pay less inheritance taxes.”
Car insurance is another area where single people lose out financially. A single person could pay almost €200 more to insure a plug-in hybrid than a married person would, even if the only difference between the drivers is their marital status, according to the online broker coverinaclick.ie.
