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Calculating your Income Tax

How tax credits work

Tax credits reduce the amount of tax you pay. You must have paid tax in your employment in order to use tax credits.

Note

You can claim additional tax credits you may be due for 2025. You can make a claim by clicking on the 'Manage your tax for the current year' link under the 'PAYE Services' section in myAccount.

If you are an employee, you can see your tax credits on your Tax Credit Certificate.

Revenue will notify your employer of your total tax credits. Revenue will not give them a breakdown of your tax credits, only the total amount. Your employer will use this to calculate the amount of tax to deduct from your pay.

Under the Pay As You Earn (PAYE) system, tax credits are spread evenly throughout the year. If you are working for the full year, your tax credits will be divided into:

  • 52 equal weekly amounts, if you are paid weekly
  • 26 equal fortnightly amounts, if you are paid fortnightly
  • 12 equal monthly amounts, if you are paid monthly
  • or
  • 13 equal amounts, if you are paid every four weeks.

If you have a second job or multiple employments, you can divide your tax credits between them. You can do this by clicking on the 'Manage your tax for the current year' link under the 'PAYE services' section in myAccount.

Unused tax credits

Unused tax credits in a pay period are carried forward to a later pay period or periods in the same tax year. You cannot:

  • get a refund for unused tax credits
  • or
  • carry unused tax credits into another tax year.
  • Example 1

    Gemma is single and a PAYE employee. She is entitled to claim a Personal Tax Credit and the Employee Tax Credit. 

    Gemma's tax credits for 2025
     Credits Amounts 
     Single Person Tax Credit  €2,000
     Employee Tax Credit  €2,000
     Total tax credits €4,000

    Gemma has a weekly tax credit of €76.93 (€4,000÷52). Her employer has been notified by Revenue of this amount.

  • Example 2

    Martin is single and a PAYE employee. He is paid monthly. He is entitled to claim a Personal Tax Credit and the Employee Tax Credit.

    Martin's tax credits for 2025
     Credits  Amounts
     Single Person's Tax Credit €2,000
     Employee Tax Credit  €2,000
     Total tax credits  €4,000

    Martin has a monthly tax credit of €333.34 (€4,000÷12). His employer has been notified by Revenue of this amount.

  • Example 3

    James is a PAYE employee. He is married to Claire and is taxed under joint assessment. Claire does not have an income. They have dependent children and Claire receives Child Benefit for them.

    James can claim Married Person’s Tax Credit, Employee Tax Credit and Home Carer Tax Credit.

    James' tax credits for 2025

    Credits

    Value

    Married Person’s Tax Credit

    €4,000

    Employee Tax Credit

    €2,000

    Home Carer Tax Credit

    €1,950

    Total tax credits

    €7,950

    James has a weekly tax credit of €152.89 (€7,950÷52). His employer has been notified by Revenue of this amount.

Next: What is a Tax Credit Certificate?

Published: 09 December 2024 Print this page

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