What is the Income Levy?

The Income Levy introduced in Budget 2009 applies a supplementary tax amount to your gross income. The Levy amount is calculated BEFORE any relief amounts for capital allowances, losses or pension contributions.

Below, some basic questions about the Income Levy are answered.

For comprehensive information, refer to this official Revenue Commissioners document:

Income Levy: Notes for Guidance and Implementation Arrangements for Employers

 

When does the Levy apply?

The Levy applies from January 1, 2009.

 

Who must pay the Levy?

If you are under 65, and your gross income exceeds €18,304 per annum, you must pay the Levy on the full amount of your gross income.

If you are over 65, and your gross income exceeds €20,000, you must pay the levy on the full amount of your gross income. Alternatively, if you are assessed as a married couple over 65, and your combined gross income exceeds €40,000, you must pay the Levy on the full amount of your gross income.

If your gross income is less than the above amounts, you are exempt from the Levy.

You are also exempt from the Levy if you hold a medical card.

 

Is any income exempt from the Levy?

Important examples of the types of income exempt from the Levy include the following:

·         If your annual gross income is less than €18,304, you don’t have to pay the Levy.

·         Social Welfare payments, including those received from abroad, are exempt.

·         Income in lieu of Social Welfare payments, such as Community Employment Scheme payments or the Back to Education Allowance, are exempt.

·         Income subject to Deposit Interest Retention Tax (DIRT) is exempt.

 

What are the Levy rates?

Income Thresholds	Income Levy Rate
Income up to, but not exceeding, €18,304 per annum	Exempt from the Income Levy.
Gross Income between €18,304 and €100,100 per annum	If your annual gross income exceeds €18,304, a rate of 1% is applied to the portion of your annual gross income up to €100,100, INCLUDING the first €18,304.
Gross Income between €100,101 and €250,120 per annum	If your annual gross income exceeds €100,000, a rate of 2% is applied to the portion between €100,101 and €250,120.
Gross Income exceeding €250,120	If your annual gross income exceeds €250,120, a rate of 3% is applied to the portion greater than €250,120.

 

Tags: Income Levy, Sage, Sage Payroll, Sage Quickpay, Sage Software

This entry was posted on Wednesday, February 4th, 2009 at 3:02 pm and is filed under Sage. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.