Tax guide

PAYE and Income Tax in Ireland: how it works

Income Tax is charged on your taxable income at 20% up to your standard rate band and 40% above it, then reduced by your tax credits. Employers deduct it through PAYE using Revenue's instructions. After the year ends you can review your position in myAccount and claim any credits or reliefs you missed, going back four years.

Written by PAYEWise editorial team, plain-English tax writers working from Revenue sources. Tax review: pending appointment of a named tax-qualified reviewer. Reviewed 28 October 2026.

Who pays

Anyone with : employees, pensioners, the self-employed and people with rental or investment income.

How it is calculated

Work out taxable income: gross pay less allowable deductions such as pension contributions.
Apply 20% to income within your standard rate band (44,000 euro for a single person in 2025 and 2026) and 40% to the rest.
Subtract your tax credits (Personal, Employee and any others). The result is Income Tax due.
Compare with tax deducted through payroll. The difference is a refund or an underpayment.

When it is due

Deducted each pay period under PAYE. Self-assessed taxpayers pay by 31 October (mid-November online) of the following year.

Which return

PAYE workers: the PAYE Income Tax Return in myAccount. Chargeable persons: Form 11 on ROS.

Exemptions

People aged 65 and over with income below the exemption limits.
Certain social welfare payments and some income types (for example, the first 14,000 euro of rent-a-room income).

Worked example

Single employee, 2026, taxable pay 50,000 euro.
20% x 44,000 = 8,800 euro; 40% x 6,000 = 2,400 euro; gross tax 11,200 euro.
Less credits 4,000 euro (Personal 2,000 + Employee 2,000) = 7,200 euro Income Tax due.
USC and PRSI are calculated separately.

When to get professional advice

Foreign income, share schemes, redundancy payments, or leaving or arriving in Ireland mid-year.

Terms used here

Related tools and guides

Sources and review

R2Tax rates, bands and reliefs 2022-2026officialchecked 2026-10-28
R6PAYE Income Tax Returnofficialchecked 2026-10-28

Last reviewed 2026-10-28 (awaiting sign-off by a named tax-qualified reviewer). Every factual tax rule on this page is backed by a dated Revenue source. Spotted an error? Use the contact page.

PAYE and Income Tax in Ireland: how it works

How it is calculated

Work out taxable income: gross pay less allowable deductions such as pension contributions.

Apply 20% to income within your standard rate band (44,000 euro for a single person in 2025 and 2026) and 40% to the rest.

Subtract your tax credits (Personal, Employee and any others). The result is Income Tax due.

Compare with tax deducted through payroll. The difference is a refund or an underpayment.

Related tools and guides

Sources and review

R2Tax rates, bands and reliefs 2022-2026officialchecked 2026-10-28
R6PAYE Income Tax Returnofficialchecked 2026-10-28

Last reviewed 2026-10-28 (awaiting sign-off by a named tax-qualified reviewer). Every factual tax rule on this page is backed by a dated Revenue source. Spotted an error? Use the contact page.