Employment tax credits and reliefs

The amount of tax you pay depends on your income. You can read more about how your income tax is calculated.

Income tax reliefs reduce the amount of tax that you have to pay. Here are some of the tax reliefs that relate to employment.

Budget 2025: Employee Tax Credit

From 1 January 2025, the Employee Tax Credit will increase to €2,000.

If you are in employment, tax on your income is deducted by your employer on behalf of the Revenue Commissioners. This system of deduction is known as the Pay As You Earn (PAYE) system. All PAYE taxpayers are entitled to a tax credit known as the Employee Tax Credit (formerly known as the PAYE tax credit). This is worth €1,875 in 2024 (€1,775 in 2023). If you are married and taxed under joint assessment, then you and your spouse may both claim an Employee Tax Credit.

In Ireland, most benefits from employment that are provided in addition to pay are subject to income tax. This also applies to benefits-in-kind.

Benefits-in-kind are benefits received by an employee that cannot be converted into cash but that have a cash value. Examples include provision of a company car, loans given at a special rate or provision of accommodation. Some benefits-in-kind are exempt from tax or can be received tax efficiently.

Read more about benefits-in-kind and how they are taxed.

You may be able to claim tax relief on additional costs of working from home, including electricity, heating and broadband.

Your employer can pay you a contribution towards these costs or you can make a claim for tax relief during the year or after the end of the year. Read more about Remote Working Relief.

The cost of items you buy, such as office equipment, is not eligible for Remote Working Relief.

If your employer provides you with equipment for business use, it is not taxed as a benefit-in-kind.

Some work expenses can be deducted from your income before it is assessed for tax. To qualify, the expenses must have been necessary in order to do your work and must have been spent entirely for that purpose and no other.

A mileage allowance that you receive for the use of your car for business purposes is not taxable if it does not exceed the civil service mileage rates.

There is no tax relief on expenses for getting to or from work.

The Bike to Work Scheme is a tax incentive scheme which aims to encourage employees to cycle to and from work. Under the scheme employers can pay for bicycles and bicycle equipment for their employees and the employee pays back through a salary sacrifice arrangement of up to 12 months. The employee is not liable for tax, PRSI or the Universal Social Charge on their repayments.

See Revenue for more details on expenses that can be deducted for tax purposes including flat-rate expenses. Flat-rate expenses are directly related to the nature of the employment. A standard flat rate expenses allowance (deduction) (pdf) is set for various classes of employee. The agreed deduction is then applied to all employees of the class or group in question.

If you pay into a pension, you can get tax relief on your pension contributions.

If you are resident in Ireland and commute daily or weekly to your place of work in another country where you pay tax, then you may qualify for Trans-border Workers Relief. This reduces your tax in Ireland to take account of the tax that you have paid abroad. It does this by reducing the tax you pay in Ireland on your total income so that it is in proportion to the amount of income from Irish sources.

For example, take the case where your total income was €50,000, of which €5,000 was earned in Ireland and the remainder (€45,000) was earned and taxed abroad.

The proportion of your total income that is Irish income is 1/10 (5,000 divided by 50,000).

Your Irish income tax liability is calculated as usual on the full amount of your income, €50,000.

But under Trans-border Workers Relief, this amount of tax is then divided by ten to give the tax that you have to pay in Ireland.

There are certain conditions on the duration and place of employment. More information on Trans-border Workers Relief is available (pdf).

If you are employed on board a ship and spend at least 161 days in a calendar year at sea travelling to or from foreign ports, then you may qualify for Seafarer's Allowance. The allowance is €6,350 and it is an allowance available at your highest rate of tax.

Read information on the Seafarer’s Allowance on revenue.ie.

If you have fished on a registered fishing vessel for at least 80 days in a tax year you can claim an income tax credit of €1,270 per annum.

It is not available to fish farmers. If you claim this credit you cannot also avail of the Seafarer's Allowance in the same tax year.

Read more about the Fisher Tax Credit on revenue.ie