Ireland charges income tax at two rates: 20% on income up to your standard rate cut-off point and 40% on the rest. You then subtract your tax credits from that figure. For 2026 a single person's cut-off is €44,000, and most employees have €4,000 of credits (a €2,000 personal credit and a €2,000 employee credit), so a single PAYE worker pays no income tax on the first €20,000 of pay.
Income tax is only part of the picture. USC and PRSI are charged separately and are not reduced by tax credits. This page covers income tax only; see USC explained and PRSI explained for the rest.
The 2026 standard rate cut-off points
The cut-off depends on your marital status and on any claim to the single person child carer credit, which suits a single parent with a qualifying child. Revenue publishes the figures in its tax rates, bands and reliefs chart.
| Tax status | 20% band (then 40% above) |
|---|---|
| Single, widowed or surviving civil partner | €44,000 |
| Single parent claiming the single person child carer credit | €48,000 |
| Married or civil partners, one income | €53,000 |
| Married or civil partners, two incomes | €53,000 plus the lower of €35,000 or the lower earner's income (maximum €88,000 combined) |
The extra band for a second income cannot be transferred between spouses or civil partners. If one partner earns €20,000, the couple's combined band is €53,000 plus €20,000, not €53,000 plus €35,000.
How tax credits reduce the bill
A credit is deducted from the tax you have calculated, euro for euro. A €2,000 credit saves exactly €2,000, whatever your rate. That makes credits more valuable than deductions of the same size for a basic-rate taxpayer, because a deduction only saves tax at 20% or 40% of its value.
The main credits for 2026 are listed below. Revenue's figures show no change from 2025 for these items.
- Single person: €2,000. Married couple or civil partners: €4,000.
- Employee tax credit: €2,000, for income taxed under PAYE. If your PAYE income is below €10,000 the credit is limited to 20% of it, so €5,000 of pay earns a €1,000 credit.
- Earned income credit: up to €2,000, for self-employed earnings. If you also have PAYE income, the two credits together cannot exceed €2,000.
- Further credits for rent, caring, age and medical conditions are covered in tax credits in Ireland.
Worked examples for 2026
The arithmetic below uses the single person cut-off of €44,000 and the two credits of €2,000. It excludes USC and PRSI.
| Situation | Tax at 20% | Tax at 40% | Credits | Income tax due |
|---|---|---|---|---|
| Single, €30,000 | €6,000 | €0 | €4,000 | €2,000 |
| Single, €60,000 | €8,800 | €6,400 | €4,000 | €11,200 |
| Married, one income of €60,000 | €10,600 | €2,800 | €6,000 | €7,400 |
For the €60,000 single earner, €44,000 at 20% is €8,800 and the remaining €16,000 at 40% is €6,400. The gross tax of €15,200 less €4,000 of credits leaves €11,200. For the married one-income couple, €53,000 at 20% is €10,600 and €7,000 at 40% is €2,800, so gross tax is €13,400. Credits are €4,000 personal plus €2,000 employee, so the bill is €7,400.
Pension contributions reduce the income that is taxed, which can pull part of your pay back from the 40% band into the 20% band. See pension tax relief for the limits.
What counts as taxable income
Income tax applies to pay, bonuses, benefits in kind such as a company car, rental profits, self-employed profits and most pensions. Pension contributions made through payroll reduce the amount that is taxed. Some payments are outside income tax altogether, for example Child Benefit.
Unlike the cut-off, your credits are not tied to a band. On €25,000 or €250,000 alike, the same €4,000 comes off the bill, which is why the effective rate rises more slowly than the headline 40% suggests. A single employee on €100,000 pays €31,200 in gross tax (€44,000 at 20% is €8,800, plus €56,000 at 40% is €22,400) and €27,200 after credits, an effective income tax rate of 27.2%.
How your employer applies your cut-off and credits
Revenue tells your employer your credits and cut-off through a Revenue Payroll Notification, and the employer applies them each pay day. If Revenue's records are wrong or incomplete, you can be put on emergency tax until they are corrected. A new job, a marriage or civil partnership, a change in rent paid or a change in your spouse's income are all worth reporting through Revenue myAccount, because they change the credits and band that apply to you.
If you have paid too much over the year, you can claim the difference back. The routes are explained in how to claim a tax refund.
Changes announced for 2027
Budget 2027 (6 October 2026) raises the single cut-off by €2,500 to €46,500 and lifts the personal, employee and earned income credits by €125 each to €2,125. These apply from the 2027 tax year, subject to the Finance Bill, so 2026 figures on this page are unchanged. The full list is in Budget 2027 tax changes.
Frequently asked questions
What is the standard rate cut-off point?
It is the amount of income taxed at 20% before the 40% rate starts. For 2026 it is €44,000 for a single person and €53,000 for a married couple with one income.
At what income do I start paying 40% tax?
When your taxable income passes your cut-off, so above €44,000 for a single person in 2026. Only the part above the cut-off is taxed at 40%, not your whole salary.
Do tax credits reduce USC and PRSI?
No. Credits come off your income tax only. USC and PRSI are calculated separately on gross pay.
How do I check which credits I am getting?
Sign in to Revenue myAccount and review your credits and cut-off for the current year. Your employer receives the same figures from Revenue.