Irish Budget 2025: From an employer’s perspective
Budget 2025 was announced by the Minister of Finance, Jack Chambers, yesterday, on 1st October 2024. To make life easier for you, we’ve rounded up the key areas from the Irish Budget 2025 which affect employers.
·4 min read
Budget 2025 was announced by the Minister of Finance, Jack Chambers, yesterday, on 1st October 2024. To make life easier for you, we’ve rounded up the key areas from the Irish Budget 2025 which affect employers.
Tax rates:
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 income tax cut-off point has increased by €2,000 to €44,000 (from the previous cut-off point of €42,000).
The Personal Tax Credit increased by €125 from €1,875 to €2,000.
The Employee Tax Credit increased by €125 from €1,875 to €2,000.
The Earned Income Credit increased by €125 from €1,875 to €2,000.
The Home Carer’s Tax Credit will increase by €150 to €1,950.
Universal Social Charge (USC):
Exemption threshold remains at €13,000
The 4% rate band will decrease to 3%, and will be calculated on income from €27,382.01 up to €70,044
The 2% USC rate band has increased by €1,622, from €25,760 to €27,382
National Minimum Wage:
The National Minimum Wage will increase by 80 cent from €12.70 to €13.50 per hour from 1st January 2025.
Small Benefit Exemption:
Employers will be able to give staff bonuses worth up to €1,500.
Up to five non-cash benefits can be granted by an employee in a single year under this exemption, an increase from the current limit of two.
These benefits must not be in cash.
Benefit-in-Kind on company cars:
In 2023, a temporary reduction of €10,000 in the OMV of company vans and category A to D company cars was introduced. This is being extended for a further year.
This temporary reduction will be extended until the end of 2025 and is applicable too for electric vehicles.
In addition to this temporary reduction for electric vehicles, the tapered reduction of €35,000 for electric vehicles results in an overall reduction in the OMV of €45,000 in 2025.
The 4,000 km reduction in the highest mileage band will continue to apply until 2025.
A BIK exemption is being introduced in respect of the costs incurred by an employer in connection with the installation of a charge point for the charging of vehicles at the home of a director or employee.
Revenue SPC Schema Change
A reminder of the previously announced Revenue schema change to include the new State Pension Contributory field which comes in to force from the 2025 RPNs.
Rent Tax Credit
In 2023 the Rent Tax Credit was introduced so any taxpayer that’s renting a property and isn’t receiving housing support will qualify for a rent tax credit of €750 per annum. This will increase to €1,000 for 2025, an increase of €250.
Social Welfare Payments
There will be a €12 increase to core weekly Social Welfare payments with effect from January 2025. The maximum personal rate of Illness Benefit will be increased to €244 per week. Maternity/Paternity/Adoptive/Parent’s Benefit will increase to €289 per week from 1st January 2025.
You can find the full list of changes from Budget 2025 here.
How is Bright facilitating these changes?
At Bright, we work hard behind the scenes to ensure that the software you use is always compliant and up to date with the most recent legislation.
Our payroll software solutions, BrightPay and Thesaurus Payroll Manager, will be automatically updated to reflect these changes. All you do on your end is ensure that you’re using the latest version of the software and bam – continue running your payroll as normal!
We’ve facilitated these changes instantly after every Budget announcement since BrightPay and Thesaurus Payroll Manager have been on the market. We’ve also facilitated other key payroll changes that’ve taken effect over the last number of years, including PAYE Modernisation, Statutory Sick Pay, Enhanced Reporting Requirements (ERR), and much more.
And with the recent changes to expense reporting in Ireland, we’ve made BrightExpenses available for free to all BrightPay, Thesaurus Payroll Manager and Surf Payroll customers. BrightExpenses lets you submit expenses directly to ROS though the payroll software, making ERR a more streamlined process.
Not using BrightPay or BrightExpenses? No worries. Check out our articles on why payroll processors are using BrightPay, and how to streamline ERR with BrightExpenses.
If you need the confidence of payroll software that responds quickly to changes, click here to try BrightPay.
Fully cloud payroll software
To make the lives of payroll processors even more efficient, we’re launching a fully cloud version of our multi-award-winning payroll software, BrightPay, in December 2024.
This will include BrightPay’s existing functionality, plus some goodies, including multi-user access, real-time changes and automatic updates. The beauty of cloud payroll software is that you never need to worry about updating your software to the latest version again – it will be updated automatically for you in the background, while you work (no matter what legislative changes or budget announcements take effect).
This content may have been developed with the assistance of AI tools. Content is reviewed by a member of the Bright team before publication. Guidance on legislation can be obtained from your industry body.
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