Budget 2024 puts €2,000 back in your wages - here's how and when it will happen

OFFALY LIVE BUDGET 2024 COVERAGE BROUGHT TO YOU IN ASSOCIATION WITH TULLAMORE CREDIT UNION

After weeks of talks and speculation, Minister for Finance Michael McGrath has this afternoon revealed the full budget details for 2024.

Announcing his first Budget as Finance Minister, Michael McGrath spoke to the Dáil at lunchtime today, detailing the key measures and changes to the highly anticipated Budget.

Mr McGrath said the budget will provide support for businesses and families: "As Minister for Finance, it is my role, working with colleagues, to balance the needs of our society today, while ensuring the wellbeing of our economy for generations to come."

The Minister said Budget 2024 is being "framed against a backdrop of global uncertainty – both economic and geopolitical". He said Ireland's key export markets are experiencing an economic slowdown and this has impacted on recent export performance.

"For many, the impact of inflation resulted in a deterioration in living standards in the last year. I expect living standards will improve for the vast majority in the next 12 months, with incomes growing faster than the rate of inflation."

One of the more well-publicised measures flagged in the lead into Budget 2024 is the threshold change at which workers enter the higher rate of income tax. 

In good news for workers, the threshold for paying the higher rate of tax is set to be raised by €2,000, from €40,000 to €42,000. That means workers will pay less tax on their income with the further €2,000 a year taxed at the lower 20% rate.

The move follows a similar increase in the bands in last year's Budget when the entry point to that 40% rate increased from €36,800 to €40,000. These changes will take place from January.

The USC, effectively a levy on wages introduced in 2011 after the financial crash, will also be cut for the majority or low and middle income earners. 

The 2% USC band ceiling will increase by €2,840 to €25,760, following on from last year’s increase €1,625 increase, while those at the higher bracket will be boosted by a 0.5% cut in the higher rate, which will come down to 4%. This is the first reduction in USC rates in 5 years.

Personal, Employee PAYE and earned income tax credits are being increased by €100 each to €1,875.

A single worker earning €46,000 will be more than €2,000 better off after income tax and USC changes, the Minister reported.

Following Government approval this morning, as of 1 January 2024, the national minimum wage will increase by €1.40 per hour to €12.70 per hour. 

A full time worker on the minimum wage will see an increase in their net take home pay of €2,300 per year.

The increase ensures full time workers on minimum wage will remain outside the top rates of USC while there is a modest benefit to workers above that amount.