New 1% income levy goes live in January

Don't be surprised if you find your pay packet a little lighter at the end of this month. The 1% income levy that was announced in last year's Budget goes live at the end of the month.

According to those useful people in Citizens Information, who have published a guide on their website, the levy will work as follows:

The income levy is effective from 1 January 2009. The income levy is
payable on gross income from all sources before any tax reliefs,
capital allowances, losses, pension contributions or PRSI.

You must pay the income levy if:
You are under 65 and your gross income is more than €18,304 per year

Or

You are aged 65 or over and your annual gross income is more than €20,000 for a single person or €40,000 for a married couple.

You do not pay the income levy if you:
Are under 65 with an annual gross income not more than €18,304 
Are aged 65 or over with an annual gross income not more than €20,000 for a single individual or €40,000 for a married couple 
Have a full medical card.

It's a pity that the money collected will still not fill the hole in the Governments finances.


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