Budget 2022 – The Payroll Perspective
With Budget 2022 now complete our Payroll experts analyses the key takeaways and how will they affect your employee’s net pay.
Minimum Wage has increased by €0.30 per hour for Experienced Adult Workers with younger employees also receiving increases. Workers aged 19 will receive 90% of the nominal minimum wage which is €9.45 per hour, while those aged 18 will receive €8.40 per hour and those under 18 will receive €7.35 per hour.
Standard Rate Cut Off Points have increased by €1,500 as per the table below
| Standard Rate Cut off Point | 2021 | 2022 |
| Single / Widowed Person or Surviving Civil Partner without qualifying children | €35,300 | €36,800 |
| Person qualifying for the Single Person Child Carer Tax Credit | €39,300 | €40,800 |
| Married Couple or Civil Partnership – One Income | €44,300 | €45,800 |
| Married Couple or Civil Partnership – Two Income | €44,300 & €26,300* | €45,800 & €27,800* |
Personal Tax Credit, the Earned Income Credit and the PAYE Tax Credit have all increased by €50 with all three tax credits now at €1,700.
The weekly threshold for higher rate of employer PRSI will increase by €12 from €398 to €410 per week, from the 1st of January 2022. This has been done to ensure that there is no incentive to reduce the working hours for a full-time employee on the increased minimum wage. The ceiling of the second USC rate band has also increased from €20,687 to €21,295per annum.
What does this mean for your employees’ net pay?
To illustrate how these changes will impact your employees’ take home pay we’ve included 3 simple calculations which demonstrate the impact that Budget 2022 will have on a minimum wage worker, a single person earning €38,000 and a married couple earning a combined €75,000 (split €40,000, €35,000)
Minimum Wage Employees
In the case of the minimum wage employees working a 37.5 hour week, we can see that they would earn €435.40 more per annum as a result of the changes implemented in the budget.
| Minimum Wage Employee* | 2022 | 2021 |
| Annual income | €20,475.00 | €19,890.00 |
| Tax due | €695.00 | €678.00 |
| PRSI | €556.75 | €435.85 |
| USC | €229.32 | €217.62 |
| Total deductions | €1,481.07 | €1,331.47 |
| Annual disposable income | €18,993.93 | €18,558.53 |
| Monthly disposable income | €1,582.83 | €1,546.54 |
| Weekly disposable income | €365.27 | €356.89 |
Single Worker
Most single workers will also benefit, as demonstrated in our second calculation, which shows that a person earning €38,000 per annum is likely to have more than €415 extra disposable income per year, or approx. €8 per week, when compared with last year.
| Single person with annual salary of €38,000* | 2022 | 2021 |
| Annual income | €38,000.00 | €38,000.00 |
| Tax due | €4,440.00 | €4,840.00 |
| PRSI | €1,520.00 | €1,520.00 |
| USC | €997.45 | €1,012.65 |
| Total deductions | €6,957.45 | €7,372.65 |
| Annual disposable income | €31,042.56 | €30,627.36 |
| Monthly disposable income | €2,586.88 | €2,552.28 |
| Weekly disposable income | €596.97 | €588.99 |
Married Couple
Lastly our married couple is also significantly better off making out with more than €830 extra disposable income per annum.
| Married couple with 1 salary of €45,000 & €30,000* |
2022 | 2021 |
| Annual income | € 75,000.00 | € 75,000.00 |
| Tax due | € 8,480.00 | € 9,280.00 |
| PRSI | € 3,000.00 | € 3,000.00 |
| USC | € 1,949.89 | € 1,980.29 |
| Total deductions | € 13,429.89 | € 14,260.29 |
| Annual disposable income | € 61,570.11 | € 60,739.71 |
| Monthly disposable income | € 5,130.84 | € 5,061.64 |
| Weekly disposable income | € 1,184.04 | € 1,168.07 |
*Due to the complexity of tax and PRSI regulations, results are based on a number of tax assumptions
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