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Income Tax Changes in Budget 2024 to Benefit Average Workers with up to €800 Annual Gain

The implementation of Budget 2024’s €1.3 billion income tax package is set to bring positive financial shifts for the average worker, potentially yielding an annual increase of up to €800. Finance Minister Michael McGrath confirmed the comprehensive changes to main tax credits, USC rates, and the standard rate cut-off point, benefiting approximately two million income tax payers.

Under the new measures, key tax credits, including personal, employee, and earned income, will see a €100 increase from €1,775 to €1,875. The Home Carer Tax Credit, Single Person Child Carer Tax Credit, and Incapacitated Child Tax Credit will also witness enhancements. The standard rate cut-off point is elevated by €2,000 to €42,000 for single individuals, with parallel adjustments for married couples.

In addition, the first USC rate cut in five years will see a reduction from 4.5 percent to four percent. The second rate band at two percent will rise to €25,760, aligned with the national minimum wage increase to €12.70, ensuring that full-time workers on minimum wage remain outside the top USC rates. An individual earning the average annual salary of €47,000 could anticipate a net take-home pay increase of €780 in 2024, while a couple with a combined income of €100,000 may see a gain of €1,560.

Minister McGrath highlighted that when coupled with other budget measures, such as energy credits and social welfare increments, these changes collectively form a “comprehensive response” to address the challenges posed by the cost of living. Additionally, businesses stand to benefit from enhanced supports, including an improved employment investment incentive scheme, relief for startups, and increased research and development tax credits.

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