Taxation
PAYE
Income Tax for teachers is levied under the Pay As You Earn system (PAYE). The tax year begins on the 1st January. To calculate the income tax payable on your salary you should deduct your total tax deductible expenses from your total income. The balance, or taxable income, is taxed at the applicable tax-band rate. Relevant tax credits are then deducted from the amount due.
For the year 2019 and in future, you will no longer receive a P60 at the end of the year. Instead, an Employment Detail Summary will be available to you through Revenue’s myAccount service. You will no longer receive a P45 when you leave a job. Instead, your employer will enter your leaving date and details of your final pay and deductions into Revenue’s online system and you can access these details through Revenue’s myAccount service.
Standard rate cut off point
There are two income tax rates, 20% and 41%. You pay tax at the lower rate on income up to the standard rate cut off point. Income over this amount is taxed at the higher rate. The cut off point will depend on whether you are married, single or widowed. Also, if you have any allowances which are allowed at the higher rate of tax, e.g. pension contribution, this will increase your standard rate cut off point.
| Standard rate band 2020 | |
| Single person | €35,300 |
| Married or in a civil partnership (one spouse / civil partner working) | €44,300 |
| Married or in a civil partnership (both spouses / civil partners working - maximum)* | €70,600 |
| One parent family | €39,300 |
* The increase in the standard rate tax band is restricted to the lower of €26,300 in 2020 or the amount of the income of the spouses with the lower income. The increase is not transferable between spouses.
Tax credits and standard rate cut off point will vary depending on the circumstances of each individual.
Taxation of married couples/civil partners
Both spouses or civil partners can elect to be taxed:
| (i) | In the same manner as single persons (single assessment) |
| (ii) | In respect of their combined incomes (joint assessment) |
| (iii) | Separate assessment |
Tax rates
For the year 2020 the income tax rates are:
| Single/Widowed (no dependents) | Married (one income) | ||
| First €35,300 | 20% | First €44,300 | 20% |
| Balance | 40% | Balance | 40% |
| Single/Widowed Parent | Married (two incomes) | ||
| First €39,300 | 20% | Up to €70,600 | 20% |
| Balance | 40% | Balance | 40% |
Exemption from Income Tax
You will not have to pay income tax for the tax year 2020 if your income before deductions for the year is not more than the amount shown below
Married
65 years of age, or over €36,000
Single/Widowed
65 years of age, or over €18,000
Marginal Relief will continue to apply at 40% where income does not greatly exceed the relevant exemption limit. If you qualify for this relief, you should apply immediately to Revenue, unless you were granted it last year (in which case you don’t have to apply again).
Universal Social Charge (USC)
The Universal Social Charge is a tax payable on gross income from all sources, including notional pay, after any relief for certain capital allowances, but before pension contributions.
The rates and thresholds of the Universal Social Charge 2020 are as follows:
Individual under 70 years of age
| 0.5% on the first | €12,012 |
| 2% on the next | €8,472 |
| 4.5% on the next | €49,560 |
| 8% on the balance |
However, these standard rates are modified in certain circumstances. In the case of individuals aged 70 or over, or who hold full medical cards and their income is less than €60,000:
0.5% on the first €12,012
2% on the Balance
There is a surcharge of 3% on individuals who have income from self-employment that exceeds €100,000 in a year, regardless of age.
Exempt Categories:
- Where an individual's total income for a year does not exceed €13,000
- All Department of Social Protection payments and some payments that are similar to DEASP payments but are paid by another body, such as the Community Employment Scheme or the Youthreach Training Allowance.
- Income already subjected to DIRT.
- Early Childcare Supplement
- Some employer benefits such as travel passes and the cycle to work scheme.
- Income qualifying for the Rent a Room Relief.
- Income qualifying for Childcare Services Relief.
- Income from scholarships.
- Pre-retirement access to AVCs.
A full list can be found in Section 12 of the USC manual.
Tax credits
Tax is calculated at the appropriate tax rates on gross pay and this tax is then reduced by any tax credits due, in order to arrive at the net tax payable. See below for more information on your tax credits.
Personal tax credits
The following chart gives details of the main personal tax credits for the tax year 2020:
| Single | 1,650 |
| Married or Civil Partner | 3,300 |
| Widowed - qualifying as one parent | 1,650 |
| Widowed parent - 1st year after death | 3,600 |
| Widowed parent - 2nd year after death | 3,150 |
| Widowed parent - 3rd year after death | 2,700 |
| Widowed parent - 4th year after death | 2,250 |
| Widowed parent - 5th year after death | 1,800 |
| One parent family - single | 1,650 |
| One parent family - widowed | 1,650 |
| Aged tax credit - single | 245 |
| Aged tax credit - married | 490 |
| Home carers (maximum) | 1600 |
| PAYE | 1,650 |
| Earned income | 1,500 |
| Child incapacitated | 3,300 |
| Dependant relative | 70 |
| Blind person - one spouse blind | 1,650 |
| Blind person - both spouses blind | 3,300 |
| Additional for guide dog | 825 |
| Incapacitated person employing a carer* | 75,000 (max) |
* Relief in respect of employing a carer 2020 is allowable at the individual’s highest rate of tax i.e. 20% or 40%
Superannuation/pensions
Contribution Limit
You can get tax relief, up to the relevant age-related percentage limit of your earnings in any year. The maximum relief available is dependent on the age of the contributor as follows:
| Age Limit | |
| Under 30 | 15% of relevant earnings |
| 30-39 | 20% of relevant earnings |
| 40-49 | 25% of relevant earnings |
| 50-54 | 30% of relevant earnings |
| 55-60 | 35% of relevant earnings |
| 60 years and over | 40% of relevant earnings |
Other allowances
Certain expenses are tax deductible. These expenses, subject to limits, are deducted from gross income to determine taxable income. See below for details.
Medical expenses
Certain medical expenses incurred by a tax payer for the benefit of himself/herself, spouse or any other individual for whom he/she is allowed a tax allowance are allowable for tax relief provided that none are subsequently reimbursed from another source. This applies to the children of taxpayers provided the children are under 16 years of age or are receiving full-time education up to the age of 22 years.
The following limitations apply:
(i) Sight testing and the supply of spectacles
(ii) Extraction and filling of teeth. Normal dental treatment
(i) Provision and repairs of artificial teeth
(ii) Crowns permanently cemented to the existing tooth tissue are allowable.
Allowable expenses are:
(i) Doctor’s fees
(ii) Hospital, nursing home expenses
(iii) Drugs and medical appliances
(iv) Prescribed physiotherapy and ambulance charges
(v) Expenses in relation to routine maternity care
(vi) Cost of gluten free foods for coeliac
(vii) Glucometer machine for a diabetic.
You should use Claim online or use the Form Med.1 when claiming. Use Form Med. 2 if your claim is for dental expenses.
Medical insurance premiums
Tax relief for medical insurance premiums paid to authorised insurers is granted at source. Subscribers will pay a reduced premium (80% of the gross amount) to the authorised medical insurer. This reduction is the same as giving tax relief at the standard rate of tax (20%).
Teachers’ flat rate expenses
School Principals €608
Permanent teachers €518
Part-time teacher (on full-time hours) €518
Part-time teacher (not on full-time hours) €279
Guidance Counsellors
(a) employed full-time in second-level schools €518
(b) engaged mainly in teaching general subjects but also doing part-time guidance
counselling (additional allowance) €126
The above should be claimed at the end of each tax year.
Teaching Council registration
Income tax relief on the Teaching Council's annual registration renewal fee remains in place. The tax credit is added to the teacher's flat rate expense allowance. This means that the fee in real terms is closer to €53 per annum for those paying the higher rate of tax.
Your Teaching Council fee cannot be paid by deduction at source. The fee can now be paid online.
You can find further details on the Revenue website.
Tax relief on commuter tickets
Tax Saver Commuter Tickets produce savings of up to 48% in travel costs to commuters through tax and PRSI benefits. Department of Education and Skills Circular Letter 0045/2015 sets out the terms of the scheme as it applies to Teachers.
Tax relief on service charges
Income tax relief is available for individuals who pay local authority and other service charges. Relief is given for service charges paid in full and on time in the previous calendar year.
Tuition fees
You may be able to claim tax relief on tuition fees paid for approved:
- Undergraduate courses
- Postgraduate courses
- IT and foreign language courses.
The maximum amount of fees (including the Student Contribution) that can qualify for tax relief is €7,000 per person per course.
Full-time student: There is no tax relief on the first €3,000 spent on tuition fees (including the Student Contribution)
Part-time student: There is no tax relief on the first €1,500 spent on tuition fees (including the Student Contribution)
More than one student: If you are claiming for more than one student, you will get full tax relief on tuition fees (including the Student Contribution) for the second or subsequent students.
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The information on this site is provided as a guide only and is not professional advice, including legal advice. It should not be assumed that the guidance is comprehensive or that it provides a definitive answer in every case.
In the event of any discrepancy between the version of a document obtained from this website and the designated official version, including legislation, the designated official version is the authoritative one.
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