Universal social charge

As was the case in last year’s Budget, no adjustments have been made to the USC rates in this year’s Budget.

The USC bands will be adjusted to keep a full-time worker earning the new minimum wage of €10.50 per hour outside of the higher rates of USC. This will be achieved by increasing the ceiling at which the 2% rate applies to €21,295 from €20,687. The increase in the minimum wage to €10.50 per hour and USC bands will apply from 1 January 2022.

The reduced rate of USC for medical card holders who earn less than €60,000 per annum was due to finish at the end of 2021 but has again been extended by a year to the end of 2022. There is also no change in USC for those earning less than €60,000 per annum, who are over 70 years of age. The position for both cohorts will likely be considered again in next year’s Budget.

Full details of the revised rates and bands are included in our Tax Rates and Credits 2022 table.

Income tax bands

There is a welcome increase in the standard rate band of €1,500 for all earners, increasing the band to €36,800. 

Tax credits

The personal tax credit, employee tax credit and earned income credit will each rise by €50, from €1,650 to €1,700 thereby continuing to benefit both employed and self-employed individuals.