Highest Effective Rate of Tax

Pandoras Twist

Hi All,

I'm trying to figure out what they highest rate of tax people could be paying on their income.

Income Tax - 41%
USC - 7%
PRSI - 8% (if self employed)

So would 56% be correct?

Cheers

kennyb3

Pandoras Twist wrote: »

Hi All,

I'm trying to figure out what they highest rate of tax people could be paying on their income.

Income Tax - 41%
USC - 7%
PRSI - 8% (if self employed)

So would 56% be correct?

Cheers

Not all of the income will be at the highest rates and there are credits to take account of. But the above are the highest rates BUT there is a 10% USC rate too (3% surcharge when income is over 100,100).

Pandoras Twist

Yes I know not all the income will be at that rate, I just need to know what the highest possible marginal tax rate you could be paying is

barneystinson

Pandoras Twist wrote: »

Yes I know not all the income will be at that rate, I just need to know what the highest possible marginal tax rate you could be paying is

I don't think there's an 8% PRSI rate - I presume you are basing 8% on the pre-2011 rate of 4% PRSI and 4% Health Levy. But the USC has replaced the Health Levy (and Income levy), so PRSI is now a flat 4% with no upper ceiling (I think!). So, I'm reckoning the marginal rate on income above 100,100 is:

41% Tax
10% USC
4% PRSI

55% Total

kennyb3

Barney is correct re the prsi level - answering question on a sunday night = not good.

Be careful with the use of effective as it has a very exact meaning