Sep 2022
28
Budget 2023 - An employer focus
On 27th of September 2022, Minister for Finance, Paschal Donohoe, and Minister for Public Expenditure and Reform, Michael McGrath, presented the 2023 budget. Minister McGrath called the budget a “Cost of Living Budget”, and said it was focused on helping individuals, families and businesses deal with rising prices.
Below, we've listed some of the measures from the budget which will most affect employers.
Income Tax
There are no change to tax rates for 2023, the standard rate will remain at 20% and the higher rate at 40%.
• The Standard Rate Cut Off Point (SRCOP) has been increased by €3,200 from €36,800 to €40,000
• The Personal Tax Credit increased by €75 from €1,700 to €1,775
• The Employee Tax Credit increased by €75 from €1,700 to €1,775
• The Earned Income Credit increased by €75 from €1,700 to €1,775
• The Home Carer’s Tax Credit will increase by €100
Universal Social Charge (USC)
• Exemption threshold remains at €13,000
• There are no changes to the rates of USC
• The 2% USC rate band has increased by €1,625, from €21,295 to €22,920
USC Rates & Bands 2023
• €0 – €12,012 @ 0.5%
• €12,013 – €22,920@ 2%
• €22,921 – €70,044 @ 4.5%
• €70,045 + @ 8%
Medical card holders and individuals aged 70 years and older whose aggregate income does not exceed €60,000 will continue to pay a maximum rate of 2%.
The emergency rate of USC remains at 8%.
Non-PAYE income in excess of €100,000 will continue to be subject to USC at 11%.
Rent Tax Credit
Any taxpayer that are renting a property and are not receiving housing supports will qualify for a rent tax credit of €500 per annum. In the case of married couples or civil partners this credit will be doubled. This will come into effect in 2023 but can be claimed for rent paid in 2022 in early 2023.
Tax Relief for Remote Workers
The tax relief for remote workers remains unchanged at claiming relief of to 30% of the cost of vouched expenses for heat, electricity and broadband in respect of those days spent working from home.
Small Benefit Exemption
The Small Benefit Exemption has been increased from €500 to €1,000, with employers permitted to give employees two vouchers per year, as opposed to one voucher which was permitted to date. This applies for 2022 and years following.
ASC
There are no changes to the ASC rates for 2023.
National Minimum Wage
The National Minimum Wage will increase by 80 cent from €10.50 to €11.30 per hour from 1st January 2023.
Pay Related Social Insurance (PRSI)
Due to the increase in the minimum wage on 1st January 2023 the upper threshold for paying the 8.8% Class A rate of employer PRSI is being increased from €410 to €441 from the 1st January 2023. There is no change to the PRSI credit.
VAT
The reduced rate of 9% VAT for the tourism and hospitality sector and electricity and gas bills will continue to apply until the 28th February 2023. 0% rate of Vat is introduced in respect of newspapers and news periodicals, including digital editions, defibrillators, hormone replacement and nicotine replacement therapies, and certain period products from 1st January 2023.
Social Welfare Payments
There will be a €12 increase to core weekly Social Welfare payments with effect from January 2023. The maximum personal rate of Illness Benefit will be increased to € per week. Maternity/Paternity/Adoptive /Parent’s Benefit will increase to €262 per week from 1st January 2023.
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