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Calculating your Income Tax

  1. Overview
  2. How your Income Tax is calculated
  3. What is the difference between gross and taxable pay?
  4. What is a tax rate band?
  5. What is an increased rate band?
  6. How tax credits work
  7. What is a Tax Credit Certificate?
  8. View your pay and tax details

What is an increased rate band?

In 2023, the standard (20%) rate band for couples in a marriage or civil partnership is €49,000. If both people are working it is increased by the lower amount of either:

  • €31,000
  • or
  • the income of the lower earner.

This means that the maximum standard rate band a couple can have is €80,000 (€49,000 + €31,000). It is not possible for one person to use the full amount of €80,000.

An individual can have no more than €49,000, unless they have additional reliefs such as:

Note

The increase in the standard rate band is not allowable where a couple are claiming the Home Carer Tax Credit.

  • Example 1

    Sarah and Alex are PAYE employees. They are married and are taxed under joint assessment. Sarah's annual income is €71,000. Alex is the lower earner and has an annual income of €22,500.

    Because both Sarah and Alex are working, they are due the increased rate band. It is increased by Alex’s income. This is because his income is lower than €31,000.

    Sarah and Alex's rate band is €71,500 (€49,000 + €22,500).

  • Example 2

    Oonagh and Donna are PAYE employees. They are in a civil partnership and are taxed under joint assessment. Oonagh's annual income is €54,000. Donna is the lower earner and has an annual income of €31,300.

    Because both Oonagh and Donna are working, they are due the increased rate band. It is increased by €31,000. This is because, the lower income (€31,300) is higher than €31,000.

    Oonagh and Donna's rate band is €80,000 (€49,000 + €31,000).

There is more information in Personal tax credits, reliefs and exemptions about how your rate band could be increased.

Next: How tax credits work

Published: 03 February 2023 Print this page

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