2016 Changes to your Pay
Have you Received a Payslip for 2016 and noticed it has changed from 2015? Congratulations if it is for the better! Your Pay can change for a number of different reasons from one year to the next. Here are the Main reasons.
If you were in employment for the majority of last year and continuing into this year, then the main reason your taxes will change is from Budget 2016 changes announced last October.
Basically, the Budget is the government’s annual plan as to how it will raise money in the year. Part of that is it can announce increases or decreases in the amount of money taken from your Salary.
The main Budget changes that will affect your 2016 payslips include:
Universal Social Charge (USC)
You should see a reduction in the USC you are charged in your 2016 payslips, as most of the rates went down. Instead of being charged 1.5%, 3.5% and 7% respectively on your income, you are now being charged 1%, 3% and 5.5% only.
As well as that, they changed the annual income limit (the point at which you would need to pay USC) from 12,012 to a rounder 13,000.
Pay Related Social Insurance (PRSI)
Married? Kids? only 1 working full time?
likely good news then if you say yes to the 3 questions above! Where one spouse works and the other is not, or earning a small amount, then you get an extra tax credit which saves you €1,000 in tax in 2016, up from €810 in 2015. Well worth getting, it’s available if you have dependent children, but does not increase for additions to the Brood!
Minimum Wage Changes
If you are renting and receiving the Rent Tax Credit, this has been reduced in 2016. The reductions will cost you between €40 and €160 in the year, depending on your circumstances
Non Budget Reasons for your 2016 Pay slip to Change
There are a number of other ways your Payslip could have changed in 2016, including:
Not Working the whole of 2015
If you were not working the whole of 2015, your tax charge may have been lower in 2015 as you used unused tax credits from earlier in the year in the end of year payslips. At the start of 2016, this benefit is gone and you will see a higher charge for the same pay in many cases. Always worth getting your taxes checked for a year in which you changed jobs or had a break in employment, as your tax charge or USC charge can be too high.
Change in Personal Circumstances
This can hit you either way. As your personal situation changes, for example having kids, marrying, separation – even growing older – your tax treatment can change for better or worse and this hits your payslip.
Hope this helps with figuring out why your payslip may have changed in 2016 – and best wishes for the New Year!