Tax rate

The 40% higher tax rate will remain for 2016.


Universal Social Charge (USC)

The entry threshold for USC will increase from €12,012 to €13,000. Approximately 700,000 income earners will not be liable to USC from the start of 2016.

The exemption from the higher rate of USC for medical card holders and people aged over 70 whose aggregate income is €60,000 or less will be retained in 2016. Those eligible will pay a maximum rate of USC of 3%. 

The 11% rate will continue to apply to self-employed income over €100,000. 

These measures will ensure that the marginal rate of tax for those earning up to €70,000 will be reduced to 49.5%

Employee PRSI

With effect from 1 January 2016, a tapered PRSI relief will be introduced to alleviate the step effect across a range of incomes for low pay workers. The relief will be subject to a maximum of €12 per week. It will commence at income of €352 per week and taper out at a rate of one-sixth of income in excess of the threshold. The relief will fully taper out where income reaches €424 per week. This should give rise to a significant improvement in the net incomes of low income workers.


Employer’s PRSI

The entry point for the top rate of Employer’s PRSI of 10.75% will increase by €20 per week from €356 to €376 per week.


Home Carer Tax Credit

The Home Carer Tax Credit will increase from €810 to €1,000. The income threshold up to which a home carer can earn will also be increased from €5,080 to €7,200.


Earned Income Credit

From 1 January 2016, an Earned Income Credit of €550 will be available to taxpayers earning self-employed trading or professional income and to business owners/managers who are ineligible for the PAYE credit on their salary income. The aim of this measure is to support entrepreneurs and small business-owners generating economic activity and contributing to economic recovery.


Employment and Investment Incentive Scheme (EIIS)

The changes announced to EIIS in Budget 2015 will take effect from midnight tonight (i.e. 13 October 2015). Amendments include the extension of the scheme to include companies operating qualifying nursing homes and the inclusion of small and medium sized operations irrespective of their geographical location.
In the case of companies owning and operating a qualifying nursing home the funds can be used for the purpose of enlarging the capacity of the qualifying nursing home.


High Earner’s Restriction

Profits or gains from the occupation of woodlands will be removed from the high earner’s restriction with effect from 1 January 2016.


Home Renovation Incentive (HRI)

The HRI Tax Credit is being extended until 31 December 2016.