In the Budget 2023 speech presented earlier this year, the government committed itself to implementing measures to ensure that workers do not find themselves in a position where they pay more income tax solely because of inflation. These measures include updates to the Standard Rate Cut-Off Points for income tax as well as an increase to the Personal, Employee and Earned Income Tax Credits. The Finance Minister further announced changes to the national minimum wage, USC rates and PRSI rates.
Most of these updates will be automatically incorporated into the RPNs for employees for 2023. However, some changes will require an update to the SimplePay system and our development team has been hard at work to ensure that all payslips from 1 January 2023 will apply these changes without any action required on your part.
The notable changes to PAYE, the national minimum wage, USC, and PRSI are as follows:
The Standard Rate Cut-Off Points for income tax will increase as follows:
- Weekly - From €708 in 2022 to €770 in 2023.
- Fortnightly - From €1,416 in 2022 to €1,539 in 2023.
- Monthly - From €3,067 in 2022 to €3,334 in 2023.
- Every four weeks - From €2,831 in 2022 to €3,077 in 2023.
More information on tax bases can be found on our help site here.
National Minimum Wage
The national minimum wage will increase by 80 cents from €10.50 to €11.30 per hour in respect of hours worked on or after 1st January 2023.
The second USC rate band has been increased from €21,295 to €22,920 in line with the national minimum wage increase. This will ensure that full-time workers on the minimum wage will remain outside the top rates of USC, while also providing a modest benefit to all workers whose income is above that amount.
More information on USC can be found on our help site here.
The weekly income threshold for the higher rate of employer’s PRSI will increase from €410 to €441. Employers will therefore pay the reduced rate of employer PRSI at a rate of 8.8% in respect of an employee working a 39 hour week and who is paid the national minimum wage. This is to ensure that there is no incentive to reduce the working hours for a full-time employee on the increased minimum wage.
Should you have any questions regarding SimplePay or any of our services, please don’t hesitate to reach out to our Support Team at [email protected].
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