What is the Income Levy Tax?

The Income Levy was introduced in 2009 and subsequently increased in the April 2009 budget with effect from May 2009.

It is charged on your Gross Income, so that is before any normal deductions such pension contributions, tax reliefs or medical expenses.  Some incomes are exempt from the levy, including these more common ones:

• Income subject to DIRT (Tax on deposit interest earned)
• Welfare payments or payments made in lieu of welfare.
• Child Benefit and early childcare supplement
• Shares under approved profit sharing schemes
• Rent a room relief and
• Redundancy payments

Income Levy Tax Rates

1 January 2009 to 30 April 2009

• 1%: Income up to €100,100 p.a.
• 2%: Income between €100,101 and €250,120 p.a.
• 3%: Income in excess of €250,120 p.a.

From 1 May 2009

• 2%: Income up to €75,036 p.a.
• 4%: Income between €75,037 and €174,980 p.a.
• 6%: Income in excess of €174,980 p.a.

Out of interest, the reason for the awkward looking un-rounded numbers, is that the Income Levy threshholds are calculated on a weekly basis and the annual threshhold is calculated from this.

Exempt Categories

• Where an individual's income for a year does not exceed €15,028 p.a.
• Individuals aged 65 or over whose annual income does not exceed €20,000 p.a.
• Full medical card holders
• Social Welfare payments are also excluded from the income levy

How about my Pension?

Income levy is charged on Occupational pensions, but is not charged on state pensions.

For more information

• Use our Tax Refund Calculator to work out any tax back you are due
• Apply Now for your tax refund
• Read our blog posts on the Income Levy
• Contact Us