Budget 2022: Income tax changes could put more money in your pocket

placeholder image — Budget 2022: Income tax changes could put more money in your pocket

Income tax and personal finances were one of the main talking points from Budget 2022 announced by Minister for Finance Paschal Donohoe and Minister for Public Expenditure Michael McGrath on Tuesday afternoon.

Among the measures affecting workers was an increase of 30 cent to the minimum wage, bringing it to €10.50 but beyond that, some measures could mean more money in your pocket.

The income tax bands are changing once again. Workers will now be able to earn €36,800 before hitting the higher rate of 40%. This is a €1,500 increase from €35,300. Workers now will have the first €36,800 of their salary taxed at the lower rate of 20%.

Personal and employee tax credits are also set to rise by €50.

The ceiling for the second rate of USC (Universal Social Charge) which is applied in your payslip will increase from €20,687 to €21,295, meaning a little more money in workers pockets.

These changes will put around €35 extra in people's take-home pay per month.

In further good news for workers, a new rebate has been introduced for those working from home. This will be an income tax deduction of 30% against the costs of heat, electricity and broadband when working from home.