2025 Budget - Employer Summary

Pay As You Earn (PAYE)

• There is no change to tax rates for 2025 - the standard rate will remain at 20% and the higher rate at 40%
  
  
• The Standard Rate Cut Off Point (SRCOP) has been increased by €2,000
  
  
• The Personal Tax Credit has been increased by €125 from €1,875 to €2,000
  
  
• The Employee Tax Credit has been increased by €125 from €1,875 to €2,000
  

Earned Income Tax Credit

• The Earned Income Credit has been increased by €125 from €1,875 to €2,000

Universal Social Charge (USC)

• Exemption threshold remains at €13,000
  
  
• The 2% USC rate band has been increased by €1,622, from €25,760 to €27,382
  
  
• The third rate of 4% has been reduced to 3% for 2025.
  
  
• For 2025, USC will apply at the following rates for those earning in excess of €13,000:

0.5% - Income up to €12,012

2% - Income from €12,012.01 tp €27,382

3% - Income from €27,382.01 to €70,044

8% - Income above €70,044

• Medical card holders and individuals aged 70 years and older whose aggregate income does not exceed €60,000 will pay a maximum rate of 2%.
  
  
• The emergency rate of USC remains at 8%.
  
  
• Non-PAYE income in excess of €100,000 will continue to be subject to USC at 11%.

National Minimum Wage

• The National Minimum Wage will increase by €0.80 from €12.70 to €13.50 per hour from January 1st 2025.

Pay Related Social Insurance (PRSI)

• All PRSI contribution rates will be increased by 0.1% in October 2025.

Social Welfare

• There will be a €12 increase in all weekly Social Welfare payments with effect from January 2025. The maximum personal rate of Illness Benefit will be increased to €244 per week. Maternity Benefit, Parent’s Benefit and Paternity Benefit will be increased to €289 per week.

VAT

• The reduced rate of 9% VAT for the gas and electricity will continue to apply until the 30th April 2025.

Extension of BIK Exemption for Electric Vehicles

• The BIK exemption for battery electric vehicles will be extended out to 2026 with a tapering effect on the vehicle value. This measure took effect in early 2023. For BIK purposes, the original market value of an electric vehicle will be reduced by €35,000 for 2023, 2024 and 2025. It will reduce by €20,000 in 2026 and €10,000 in 2027.