(V) ILLUSTRATIVE CASES

These cases deal only with the basic personal tax credits and the employee tax credit.  Discretionary tax reliefs such as mortgage interest relief or rent allowance or charges such as benefit in kind are not taken into account.  For illustrative purposes, some of the figures in the attached examples are rounded to the nearest euro.

David

David is single and employed as a waiter and is earning €14,000 per annum.  He will gain €140 from the Budget.

 

2002

2003

Gross Income

Standard Rate Band

Income Tax liability (€14,000 @ 20%)

Less Tax Credits

Total Income Tax Due

PRSI

Levies

Total Liability

Net Cash Income

Deductions as a % of Gross Income

14,000

28,000

  2,800

  2,180

    620

 0

 0

     620

13,380

4.4%

14,000

28,000

 2,800

 2,320

   480

0

0

   480

13,520

3.4%

James and Annemarie

James and Annemarie are a retired couple.  James is aged 75 and Annemarie is aged 70.  James has an occupational pension of  €30,000.  After the Budget they will be outside the tax net.  They will gain €1,600 from the Budget as a result of the tax changes.

 

2002

2003

Gross Income

Exemption Limits

Income Tax (€4,000@40%^)

Net Cash Income

Deductions as a % of Gross Income

30,000

26,000

  1,600

28,400

5.3%

30,000

30,000

0

30,000

0%

^marginal relief rate of 40% payable on income in excess of the exemption limits

^^ like the majority of those over 65 it is assumed that there is no liability for PRSI

Duncan and Mary

Duncan and Mary are married with two children.  Duncan is employed as an information technology technician earning €40,000 while Mary works in the home.  They will gain €95 from the Budget.

 

2002

2003

Gross Income

Standard Rate Band

Income Tax liability

Less Tax Credits

Total Income Tax Due

PRSI

Levies

Total Liability

Net Cash Income

Deductions as a % of Gross Income

40,000

37,000

  8,660

  4,470

  4,190

  1,291

   800

  6,281

33,719

15.7%

40,000

37,000

 8,660

 4,610

 4,050

 1,336

   800

 6,186

33,814

15.5%

John and Stephanie

John and Stephanie are a married couple with two children.   John is a garda earning €35,000 and Stephanie is employed as a solicitor and earning €45,000.  They will gain €223 from the Budget.

 

2002

2003

Gross Income

Standard Rate Band

Income Tax liability

Less Tax Credits

Total Income Tax Due

PRSI

Levies

Total Liability

Net Cash Income

Deductions as a % of Gross Income

80,000

 56,000^

21,280

  4,360

16,920

  1,624

  1,600

20,144

59,856

25.2%

80,000

 56,000^

21,280

  4,640

16,640

  1,681

  1,600

19,921

60,079

24.9%

                                       ^ With maximum transferability between spouses of €37,000

Liam and Georgina

Liam and Georgina are a married couple with three children.  Liam is self employed and runs his own business and earns €35,000 and Georgina is employed as an accountant and earning €65,000.  They will gain €83 from the Budget.

 

2002

2003

Gross Income

Standard Rate Band

Income Tax liability

Less Tax Credits

Total Income Tax Due

PRSI

Levies

Total Liability

Net Cash Income

Deductions as a % of Gross Income

100,000

    56,000^

  29,680

   3,700

 25,980

  2,442

  2,000

30,422

69,578

30.4%

100,000

    56,000^

  29,680

   3,840

 25,840

   2,499

   2,000

30,339

 69,661

30.3%

                      ^ With maximum transferability between spouses of €37,000

Anne

Anne is a widow aged 68, with a pension from her late husband’s employment of  €14,770.  She is also in receipt of a widow’s contributory pension of €7,530 which will increase to €8,102 in the Budget.  She will gain €598 as a result of the tax and social welfare changes in the Budget.

 

2002

2003

Gross Income

Standard Rate Band

Income Tax liability

Less Tax Credits

Total Income Tax Due

PRSI

Levies

Total Liability

Net Cash Income

Deductions as a % of Gross Income

22,300

28,000

 4,460

 2,685

 1,775

0

0

 1,775

20,525

8.0%

  22,872^

28,000

 4,574

2,825

1,749

0

0

 1,749

21,123

7.6%

                    ^The increase in Gross Income is as a result of the increase in social welfare payments.

Sharon

Sharon is single and has a five-year-old son.  Sharon works as a secretary and earns €24,000.  She will gain €140 from the Budget.

 

2002

2003

Gross Income

Standard Rate Band

Income Tax liability

Less Tax Credits

Total Income Tax Due

PRSI

Levies

Total Liability

Net Cash Income

Deductions as a % of Gross Income

24,000

32,000

 4,800

 3,700

  1,100

    696

    480

 2,276

21,724

9.5%

24,000

32,000

  4,800

  3,840

    960

    696

   480

  2,136

21,864

8.9%