How is my Tax Calculated?

Patrick is single and earns €28,000 a year. He receives his notice of determination of tax credits and standard rate cut-off point from Revenue.

Patricks’s tax credits are listed on the notice as:
Single Person Tax Credit = €1,830
Employee Tax Credit = €1,830
Tax credit total = €3,660

The standard rate cut-off point for a single person is €36,400. As a result of Patrick’s income being below the cut-off point, all of his income is taxed at the standard rate, (20%), to give his gross tax.

€28,000 x 20% = €5,600 gross tax.
The total tax credits are deducted from gross tax to give the tax that is payable:

€5,600 - €3,660 = €1,940

Patrick is also liable to pay the income levy at 2% of his gross income:
€28,000 x 2% = €560

The total amount deducted from his income is:
€1,940 (income tax) + €560 (income levy) = €2,500

This is a basic calculation and does not include deductions for PRSI.