Budget 2025 Changes

On 1 October 2024, the Ministers for Finance and Public Expenditure, NDP Delivery, and Reform presented the 2025 Budget. In it, the government introduced several measures, effective from 1 January 2025, including changes to the Standard Rate Cut-Off Points for income tax, as well as changes to emergency rates, tax credits, and the Universal Social Charge (USC).

Most updates to employees’ Revenue Payroll Notifications (RPNs) for 2025 will happen automatically. Since a few of these changes require system tweaks, our development team is already working on ensuring a smooth transition when the changes take effect. No action is needed on your part, and payslips will automatically incorporate the new regulations from 1 January 2025.

The noteworthy changes are detailed below.

PAYE

The Standard Rate Cut-Off Points for the Emergency Tax basis have been increased as follows:

• Weekly - From €808 to €846.16
• Every 2 weeks - From €1,616 to €1,692.32
• Monthly - From €3,500 to €3,666.67
• Every 4 weeks - From €3,231 to €3,384.64

More information on tax bases can be found on our help site here.

USC

USC details, crucial for payroll, are provided via RPNs. Key updates for next year include:

• No change to the USC exemption threshold of €13,000.
• An increase of €1,622 in the threshold for the 2% USC rate band, from €25,760 to €27,382.
• A change in the 4% rate of USC, which will be reduced to 3%, for income within the range of €27,382.01 to €70,044.

More information on USC can be found on our help site here.

Small Benefit Exemption

The Small Benefit Exemption limit is increasing from €1,000 to €1,500. Additionally, the allowable number of tax-exempt benefits will increase from a maximum of the first 2 benefits per year to the first 5 benefits per year, as long as the total value doesn’t exceed €1,500.

National Minimum Wage (NMW)

The NMW will increase by €0.80, from €12.70 to €13.50 per hour, in respect of hours worked on or after 1 January 2025. The simultaneous increase in the 2% USC threshold will ensure that employees working up to 39 hours per week and earning the NMW remain outside the top rates of USC.

As we approach the new tax year, rest assured that SimplePay has you covered for a smooth, compliant payroll experience. Keep an eye out for more updates in the remainder of the year.

Should you have any questions or concerns, please feel free to reach out to our friendly Support team at support@simplepay.cloud.

If you aren’t a SimplePay member yet, but you’re interested in simple and efficient payroll software, why not sign up for a free 30-day trial? You can do so by clicking here.

Take care,

Team SimplePay