Dáil Éireann Debate, Tuesday - 24 June 2025
314. Deputy Aidan Farrelly asked the Minister for Finance the minimum effective tax rate on individual earnings for each of the past ten years; and the level of earnings at which that minimum effective tax rate applied in each of those ten years, in tabular form. [34209/25]
Amharc ar fhreagra315. Deputy Aidan Farrelly asked the Minister for Finance the estimated first- and full-year yield from each percentage point increase in the minimum effective tax rate on individual earnings in 2026; and the estimated the first- and full-year yield from each €10,000 reduction in the level of earnings at which that minimum effective tax rate applies. [34210/25]
Amharc ar fhreagraI propose to take Questions Nos. 314 and 315 together.
In regard to the Deputy’s questions, the structure of the Irish personal income tax system does not provide for a minimum effective tax rate and so it is not possible to perform the analysis requested. An individual will normally pay income tax, PRSI and USC on their employment income and earnings, and the rates at which they are liable to these charges is dependent on their overall level of income and their own specific circumstances.
However, the average effective tax rates for individuals at various income levels were published as part of the Budget 2025 documentation in the Tax Policy Changes document. This document includes tables that show the average effective tax rates on a range of annual earnings in respect of income tax, PRSI and USC as a proportion of gross income. This is available by various household types, including single persons, married couples with children, PAYE and self-employed income earners over a wide distribution of income levels between €15,000 and €120,000 from 2009 to 2025.
This document also includes detailed distributional analysis of the tax measures announced in Budget 2025, which demonstrate the effect of changes to some payments from the Department of Social Protection such as Child Benefit and the Working Family payment.
The document is available at the following link: assets.gov.ie/static/documents/budget-2025-tax-policy-changes.pdf.
