Budget 2025; Everything that you need to know

It’s been one of the most hotly anticipated budgets in recent years and today the details of Budget 2025 have been announced.As we now have come to expect, most changes had already been disclosed by the media before being announced, specifically around social welfare and key tax changes.
Minimum Wage
• Minimum wage to rise from €12.70 to €13.50
Income Tax
There was an increase of €2,000 in the income tax standard rate band cut-off point for all earners:
• Single, widowed or surviving civil partner from €42,000 to €44,000
• Single, widowed or surviving civil partners, qualifying for the Single Person Child Carer Credit from €46,000 to €48,000
• Married couples or civil partners (one income) from €51,000 to €53,000
• Married couples or civil partners (two incomes) from €51,000 to €53,000 (with the maximum increase in the rate bands capped at the lower of €35,000 or the income of the lower earner).
There was also an increase each of the Personal Tax Credit, Employee PAYE Tax Credit and Earned Income Credit by €125, from €1,875 to €2,000 and an increase of €150 in the Home Carer Tax Credit from €1,800 to €1,1950 and an increase of €300 in the Incapacitated Child Tax Credit.
Universal Social Charge (USC)
Incomes less than €13,000 are exempt from USC. Otherwise, the following USC rates will apply from 1 January 2025:
Income
€0 – €12,012……………… @ 0.5%
€12,013 – €27,382…….. @ 2% (there was an increase of €1,622 to the ceiling for the 2% rate band)
€27,383 – €70,044……… @ 3% (there was a reduction from 4% to 3%)
€70,045+…………………….. @ 8%
Self-employed income over €100,000 = 3% surcharge
PRSI
There were no changes in the Pay Related Social Insurance (PRSI) contribution rates for 2025.
Savings: Corporate Deposits
The current corporate exit tax rate remains at 25%, in line with corporation tax for non-trading income.
Capital Acquisition Tax (CAT)
There were some welcome increases in the CAT Thresholds, as follows:
• The Group A Threshold (gifts or inheritance from a parent) increased from €335,000 to €400,000.
• The Group B Threshold (gifts or inheritance from a brother/sister/aunt/uncle/grandparent/foster child) increased from €32,500 to €40,000.
• The Group C Threshold (relationship other than A or B) increased from €16,250 to €20,000
• The rate of Capital Acquisition Tax remains at 33%.
Capital Gains Tax (CGT)
• Capital Gains Tax rate remains at 33%.
Social Welfare Pensions
• Budget 2025 confirmed that the State Pension (Contributory) Personal Rate will increase by €12 per week from €277.30 per week to €289.30 per week from January 2025.
• Double payment of Child Benefit to be paid in both November and December 2024 to support all families with children.
• €250 worth of energy credits – split over two payments, one to arrive this year, the other next year.
• €400 cost of living lump sum payment to all families getting the Working Family Payment to be paid in November
• €400 cost of living lump sum payment to all families getting the Working Family Payment to be paid in November
• €100 cost of living lump sum payment for people getting a Child Support Payment (previously known as Increase for a Qualified Child ) to be paid for each qualified child in November
Pensions – No Changes
In summary, there were no changes in Budget 2025 to the following:
• Employer Pension Contributions – Corporation Tax relief will continue to be available on Employer Pension Contributions paid to an approved Occupational Pension Scheme – subject to the overall maximum pension funding and benefit limits.
• Employer Contributions to a PRSA – the Finance Act 2022 removed the Benefit-in-Kind Charge on an Employer Contribution to a PRSA. Corporation Tax relief will continue to be available on Employer Contributions to a PRSA and there is currently no limit on employer contributions to an employee’s PRSA, although there has been a lot of discussion in the media on this subject recently.
Tax Relief – Employee Pension Contributions – This relief will continue at the marginal rate of income tax but subject to the Age-Related Contribution Limits and Earnings Cap (and overall Revenue Maximum Approvable Benefit limits).
Employer Corporation Tax –The Corporation Tax Rate remains at 12.5% for the vast majority of businesses in Ireland (and a rate of 15% applies to large firms which have a turnover of €750 million or more).
Retirement Lump Sum – up to €200,000 remains tax-free and amounts from €200,000 to €500,000 will be taxed at 20%.
For more information contact Frank Ryan Financial Services

Sourse; Zurich Life