taxes and social security in ireland

Taxes and Social Security in Ireland

Understanding how taxes and social security in Ireland work is essential for anyone planning to live or work in the country. Ireland operates a progressive tax system, and all residents who earn income are expected to contribute through income tax, Pay Related Social Insurance (PRSI), and the Universal Social Charge (USC). These contributions fund public services such as healthcare, education, pensions, and unemployment benefits.

Whether you’re starting your first job, moving to Ireland from abroad, or working as a freelancer, it’s important to know your rights and obligations within the Irish taxation and social welfare system. Being informed will help you avoid penalties, access entitlements, and manage your finances effectively.

Tax Residency and PPS Number

Before you begin working or paying taxes and social security in Ireland, you need to determine your tax residency status and obtain a Personal Public Service Number (PPS Number).

  • Tax Residency: You are considered tax resident in Ireland if you spend 183 days or more in the country in a tax year, or 280 days over two consecutive years (at least 30 days in each). Tax residents are taxed on their worldwide income, while non-residents are taxed only on Irish-sourced income.
  • PPS Number: This is a unique reference number required for accessing tax, social welfare, and public services. You need a PPS number to work legally, claim benefits, or open a Revenue account.

Income Tax in Ireland

Income tax in Ireland is calculated on a progressive basis. The more you earn, the higher the rate you pay.

As of 2025, the rates are:

  • 20% Standard Rate: Applied to income up to €42,000 for a single person
  • 40% Higher Rate: Applied to income above €42,000

These thresholds may vary depending on your personal circumstances (e.g. married couples or single parents have different bands). In addition to income tax, workers also contribute to USC and PRSI.

Universal Social Charge (USC)

USC is a separate charge applied to gross income before deductions. It applies to most employees, with lower-income earners paying less:

  • 0.5% on income up to €12,012
  • 2% on income from €12,013 to €22,920
  • 4.5% on income from €22,921 to €70,044
  • 8% on income above €70,044

Certain groups, such as medical card holders or full-time students under 23, may qualify for reduced USC rates.

Pay Related Social Insurance (PRSI)

PRSI is used to fund social security in Ireland. Contributions are made by both employers and employees. The amount you pay depends on your employment status and earnings:

  • Most employees pay 4% PRSI on income over €352 per week.
  • Employers also contribute on behalf of the employee.

PRSI payments are essential for qualifying for benefits such as the State Pension, Jobseeker’s Allowance, Maternity Benefit, and more.

Registering for Tax

To begin paying taxes and social security in Ireland, you must:

  1. Apply for a PPS Number (if you don’t already have one)
  2. Register your job with Revenue via the myAccount portal
  3. Provide your employer with your PPS number to ensure correct tax deductions

Revenue will then issue a Tax Credit Certificate, which informs your employer how much tax to deduct from your salary.

If you do not register correctly, you may be placed on emergency tax, which results in higher deductions.

Self-Employed and Freelancers

If you are self-employed in Ireland, you are responsible for declaring and paying your taxes and social security contributions yourself.

You must:

  • Register with Revenue as self-employed
  • Submit an annual tax return via Revenue Online Service (ROS)
  • Pay preliminary tax (advance tax for the following year) by 31 October each year
  • File your final return by the same deadline

Self-employed individuals also pay Class S PRSI and may need to pay USC depending on their income.

Social Welfare System in Ireland

Contributions to taxes and social security in Ireland grant you access to a range of social welfare benefits, administered by the Department of Social Protection. These include:

  • Jobseeker’s Benefit / Allowance
  • Maternity and Paternity Benefits
  • Illness Benefit
  • Disability Allowance
  • State Pension (Contributory)
  • Working Family Payment

Eligibility depends on the amount and class of PRSI contributions you have made and your overall income situation.

Tax Credits and Reliefs

Ireland offers a variety of tax credits and reliefs to reduce your overall tax liability. Common credits include:

  • Personal Tax Credit
  • PAYE Tax Credit (for employees)
  • Home Carer Credit
  • Rent Tax Credit
  • Tuition Fee Relief

Claiming the right credits can significantly reduce how much tax you owe. You can manage and update your tax credits through the Revenue myAccount system.

Additional Considerations

  • Medical Expenses: You can claim tax relief on eligible medical expenses not covered by insurance.
  • Pensions: Contributions to pension schemes may be tax deductible.
  • Tax Returns: Most employees do not need to file an annual return unless they have additional income or wish to claim extra reliefs.

Final Note

Navigating taxes and social security in Ireland may seem complex at first, but the system is designed to be accessible and fair. By registering properly, understanding your obligations, and keeping good records, you’ll be better prepared to manage your financial life and access the public benefits you’re entitled to. Whether you’re working full-time, freelancing, or transitioning between jobs, staying informed about your tax and PRSI responsibilities will ensure peace of mind during your time in Ireland.