Tax and welfare

The state of play

Tax bands

The first €35,400 of your income is taxed at a rate of 20 per cent.

This is known as the standard rate tax band. Any income you earn above this sum is subject to tax at a rate of 41 per cent.

The standard rate band for single parents is €39,400, while married couples where just one partner is in the workplace only pay the higher rate of tax on income above €44,400.

If one partner in a dual-income married couple earns more than €35,400 and the other partner earns less than this sum, then he/she can take advantage of the "unused" standard rate tax band so that he/she can earn up to €44,400 before the higher tax rate kicks in.

Employees are charged pay-related social insurance (PRSI) at a rate of 4 per cent, with self-employed people paying 3 per cent.

Once workers earn more than €500 a week they are also charged a 2 per cent health levy.

A typical employee therefore pays a further 6 per cent for PRSI and the health levy on top of tax.

However, no PRSI is charged on earnings in excess of €50,700 - this is known as the PRSI ceiling - and there is an extra 0.5 per cent health levy for high earners - those taking home more than €100,100 a year.

Tax credits

Everyone who pays tax is entitled to personal tax credits. These credits reduce the amount of tax that they owe.

If you are an employee, your employer will subtract them from your monthly tax liability evenly over the course of the year.

In total, a single person receives a personal tax credit of €1,830.

This credit is €3,660 (double) for a married couple and is split between them or allocated to the higher earner. Employees also receive a pay-as-you- earn (PAYE) tax credit worth €1,830.

The one-parent family tax credit is also worth this sum.

A €900 home carer's tax credit is available to married couples where one partner stays at home to care for a child, an incapacitated person or someone aged 65 and over.

Social welfare

On the social welfare side, parents receive an increase in child benefit payments every April.

The current rate is €166 a month for the first and second child and €203 for the third and any subsequent children in the family.

An early childcare supplement of €275 is paid every quarter in respect of each child under the age of six.

The State contributory pension (for people with a record of PRSI contributions) is worth a maximum of €223.30 a week, while the means-tested non-contributory pension currently has a top rate of €212.

The carer's benefit for people who leave work to care for one person is €214.70 a week.

The job-seeker's benefit and allowance, which is paid to unemployed people and to some part-time or casual workers, is €197.80 a week.