Republic of Ireland: Income Levy – Guidance for employers publishedMonday, December 8th, 2008
The 2009 Budget included the introduction of a new income levy from 1 January 2009, to be paid by employees and by the self-employed on top of the income tax they already pay and collected by employers.
Revenue has now published more detailed guidance on the levy in the format of a question and answer document entitled Income Levy – Notes for Guidance and Implementation Arrangements for Employers.
The income levy is payable on gross income before any relief for any capital allowances, losses or pension contributions. All individuals are liable to pay the income levy if their gross income exceeds the threshold of €18,304 p.a., or they exceed the income exemption limit of €20,000 p.a. for an individual over 65 years – or €40,000 p.a. for an over-65 married couple.
The rates and thresholds are as follows:
For example, the levy on annual earnings of €300,000 is €5497.80, i.e.
(100,100 × 1%) + ((250,120 -100,100) × 2%) + ((300,000 – 250,120) × 3%)
The collection procedure for employers is as follows:
- total amount of income levy for each individual
- particulars of the amount of income levy paid at each rate
- total income on which income levy is based
Employers should pay the income levy to the Collector General at the same time and in the same manner as the deductions under the PAYE system.
Income Levy – Notes for Guidance and Implementation Arrangements for Employers
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