The income tax cuts and USC changes announced in Budget 2025

THE STANDARD RATE cut off point for income tax in Ireland is being increased by €2,000 as part of this Budget. 

This means workers will only pay the higher rate of 40% tax on income over €44,000. Proportionate increases have also been announced for married couples.

Minister for Finance Jack Chambers has just made the announcement in the Dáil as part of Budget 2025. 

He has also confirmed that the 4% USC rate will be cut to 3%. 

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From 1 January 2025 the minimum wage will increase by 80c to €13.50 per hour. 

To ensure that workers on the minimum wage remain outside of the entry threshold to the new 3% USC rate, the entry point will be increased by €1,622 to €27,387.

This means that a full time worker on the minimum wage will see an increase in their net take home pay of approximately €1,424 on an annual basis. 

As part of the Budget the main tax credits – personal, employee and earned income tax credits will all increase by €125. 

Meanwhile the home carer tax credit will increase by €150. 

The single person child carer credit will increase by €150. 

The incapacitated child tax credit by €300 and the dependent relative tax credit by €60. 

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