Will I pay more tax in 2022? How Ireland’s workers’ income will change this year

A number of changes to taxes came in after the New Year, as set out in the Budget back in October.

This has left people wondering if they will be paying more tax in 2022 than they were in 2021.

Changes to taxes this year will see a slight alteration to your take-home pay, as well as changes to the band you may fall under.

On December 21, the Finance Act was signed and changes to the likes of income tax, USC and others were to be implemented.

Changes to universal social charge were made to reflect the increase in the minimum wage, which has gone up to €10.50 from €10.20 per hour.

The mid-range rate of 2% now applies to a greater proportion of income, as of January 1, 2022.

Workers on this rate will notice an increase in the money they take home, which is now at €15.20 per year.

Tax rate bands have also increased by €1,500 for those on the lower scale. This means it will increase to €36,800 from €35,300. Those earning above €36,800 will see a tax saving of €300.

Those who are self-employed, such as farmers, artists or freelancers, may not see a change in this until 2023 after they have filed their income tax return for this year.

It will also apply to married couples with either one or two earners, and those who claim the single person child carer credit.

Personal tax credit, employee tax credit and earned income tax credit will also increase from €1,650 to €1,700 respectively.

All increases have been applied as of January 1.

For PAYE workers who earn more than €36,800 and pay tax as they earn throughout the year, they will see a reduction on payments as they are paid throughout the year.

Those that are a two-income joint assessed couple, with one on the lower tax band and one on the higher, will see an increased band of €45,800.

Personal Tax Credit, Employee Tax Credit, Earned Income Tax Credit and the Widowed Person or Surviving Civil Partner (without dependent child) Tax Credit will all rise by €50.

The Budget included an enhancement to the current working from home income tax reliefs.

This means that 30% of vouched expenses for electricity, heating and internet services on the days you work from home will now be available. This is an increase of 20% from 10%