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The 2024 Budget was announced on Tuesday, 10 October 2023. The Budget contained a number of changes that employers and employees need to be aware of from a HR perspective.

What is the Budget 2024?

The Budget is the amount of money the Government has to spend each year, and what it decides to spend it on. On Budget Day, the Government will give a detailed breakdown of how much money it expects to collect in the year ahead (income) and how that income will be spent across all Government Departments (expenditure).

How will the Budget affect HR matters in 2024?

A total of €979 million has been allocated to the Department of Enterprise, Trade and Employment in 2024.

1. Wage increase

It was announced that the minimum wage will increase from 1 January 2024. The national minimum wage for people aged 20 and over will increase by €1.40 to €12.70 per hour.

2. Increase of Tax Rates

Income tax rates will stay the same (at 20% and 40%), but there will be increases in tax credits and changes to the income tax bands for 2024.

The standard rate tax band (the amount you can earn before you start to pay the higher rate of tax) will be increased by €2,000 to €42,000 for a single person, married couples, and civil partners.

The following tax credits will increase by €100 to €1,875:

  • Personal Tax Credit
  • Employee Tax Credit
  • Earned Income Tax Credit

All PRSI rates will increase by 0.1% on 1 October 2024.

3. Universal Social Charge (USC)

The Universal Social Charge (USC) is tax you pay on gross income, including notional pay (notional pay is a non-cash benefit, such as benefit-in-kind), after any relief for certain capital allowances. If your total income is €13,000 or less per year, you do not pay any USC. If it is more than €13,000 per year, you pay USC on your full income.

The ceiling for the 2% Universal Social Charge (USC) band will increase by €2,840 from €22,920 to €25,760 from 1 January 2024. The 4.5% USC rate that currently applies to income between €22,920 and €70,044 will be reduced to 4% from 1 January 2024. The 4% rate will apply to income between €25,760 and €70,044.

4. VAT Rates

The registration threshold for businesses paying VAT is set to rise, for services, it will increase from €37,500 to €40,000, and for goods, it will increase from €75,000 to €80,000.

5. Cost of Business scheme

€250m will be made available for up to 130,000 small businesses through the Increased Cost of Business Scheme. Grants, up to 50% of 2024 commercial rates, will be given to businesses paying €20,000 or less. Payments will be made early in 2024.