Budget 2024, announced on 10 October 2023, contains a number of changes that will impact payroll. It’s important to familiarise yourself with the various measures and check that your payroll is ready to reflect any changes that affect your business. These will include the tax credit, band changes and revised USC thresholds mentioned below.
Personal tax credits
2024 will see modest increases in a number of personal Income Tax credits. These are mostly an increase of €100 in 2024 compared to 2023. Revenue has summarised the changes in a useful table which is available here.
Tax bands are being increased by €2,000. The lower and higher rates for Income Tax (20% and 40%) are unchanged. For details, see the Revenue table which is available here.
USC on income up to €12,012.00 will remain at 0.5%. The 2% rate will apply to income from €12,012.01 to €25,760.00. A 4% rate will apply to income from €25,760.01 to €70,044.00, and an 8% rate to income above €70,044.00.
A reduced rate of USC of 2% applies to individuals aged 70 years or over whose aggregate income for the year is €60,000 or less. The reduced rate will also apply for 2024 and 2025 for full medical card holders under 70 years whose aggregate income for the year is €60,000 or less.
In his Budget statement, the Minister for Public Expenditure Paschal Donohoe said that PRSI contribution rates will increase by 0.1% from 1 October 2024. This will affect all PRSI contribution rates. It represents the first step in a measured approach to raising these rates over a number of years.
National Minimum Wage
The national minimum wage will increase by €1.40 per hour to €12.70 per hour from 1 January 2024.
Following the Budget,Revenue published a useful summary of all of the key tax provisions and changes. This is available on the Revenue website. If you are a GroForth client and have questions about the Budget implications for your payroll, please contact a member of our team.
Note that the Finance Bill published on 19 October 2023, which will give effect to the measures announced in the Budget, is currently making its way through the Oireachtas. This legislation contains a number of other measures that may affect your business. Check with your accountant if you need information or advice on how the changes.