Earlier today Finance Minister Paschal Donohoe delivered his Budget 2018 speech to the Dáil. The impact to the average worker’s wages are minimal, but any changes that have been made should mean an increase to your pay each month.
The key impacts of Budget 2018 on wages are:
For the second time in a row, the minimum wage is set to increase. It will be increasing from €9.25 to €9.55 from January 2018.
There will be a €200 increase in Earned Income Credit for self-employed, bringing it to €1,150 in 2018.
Income Tax Band
The point at which the higher 40 per cent rate for income tax kicks in will rise by €750 from €33,800 to €34,550. This means an extra €150 a year for those who earn enough to benefit.
There have been cuts to two rates of USC, tax payable on your total income, with the changes worth an average of €250.
- The main 5% USC rate, which applies on incomes between €18,772 and €70,044, is to be cut by 0.25 to 4.75%.
- The lower 2.5% rate is cut to 2% and the band of income to which this applies is widened from €18,772 to €19,372.
If you’re interested in how much exactly your wages are set to increase you can use this Budget Calculator.
Overall the impact of Budget 2018 is minimal on most people’s wages, with slight decreases on lower bands of USC being the main point of note. Another point of note mentioned during Budget 2018 is unemployment is at 6.1 per cent, its lowest since 2008, while If you have children, the government has pledged €20 million to extend the free pre-school programme – another decision which could see your wages benefit.