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Budget 2018 Highlights

Budget 2018 for Businesses

Corporation Tax: the corporation tax rate will remain at 12.5%

BIK: for 2018 there will be a 0% BIK rate on electric vehicles


  • there will be no change to the 9% VAT rate in the tourism sector in 2018
  • 2019 will see the introduction of a VAT refund scheme for charities. This scheme will compensate charities on VAT incurred in 2018
  • there will be an increase in VAT on sunbeds (rising from 13.5% to 23%)

Stamp Duty: there has been an increase in stamp duty on commercial property transactions – from 2% to 6%

Key Employee Engagement Programme (KEEP): a share based employee incentive programme (KEEP) will be introduced January 1st 2018 that will run until December 31st 2023. Remuneration via KEEP share options to employees will be liable to CGT (not income tax, USC and PRSI which are the current liabilities)

National Training Fund Levy: the National Training Fund Levy is set to increase from 0.7% to 0.8% in 2018, 0.9% in 2019 and 1% in 2020

Budget 2018 for Employees

Tax Rates: the 20% standard tax rate and 40% higher tax rate remain unchanged

Standard Rate Cut Off Point (SRCOP): the SRCOP will increase by €750 per year from January 1st 2018

Universal Social Charge (USC): the USC exemption threshold of €13,000 will remain unchanged. The 2.5% rate has dropped to 2%, the 5% rate is down to 4.75% and the 8% rate will not change. Also the surcharge rate of 3% for non-PAYE income over €100,000 will remain unchanged

Earned Income Tax Credit (EITC): EITC will increase from €950 to €1,150. If a person qualifies for EITC and PAYE Tax Credit then the combined total cannot exceed €1,650

National Minimum Wage: the national minimum wage will increase January 1st 2018 from €9.25 to €9.55 for an experienced adult worker. Employees under 18 will be entitled to €6.69 (up from €6.48) per hour while employees over 18 in their first and second years of employment will be entitled to €7.64 (up from €7.40) and €8.60 (up from €8.33) per hour respectively.

Budget 2018 Miscellaneous

Excise Duty: excise duty on alcohol, diesel and petrol will remain unchanged, however, from midnight 10/10/2017, a pack of 20 cigarettes will be 50 cents more expensive (other tobacco products will also increase proportionally)

Motor Tax: motor tax for private vehicles will not change

Sugar tax: April 2018 will see an introduction of tax on sugar sweetened drinks at a rate of 20 to 30 cents per litre depending on the amount of grams of sugar per 100 millilitres contained in the drink

Social Welfare: weekly social welfare payments will increase by €5 from March 26th 2018 (there’ll be a proportionate increase for qualified adult dependents also). The rate for a qualified child will increase from €29.80 to €31.80

Vacant Site Levy: this will increase from the current 3% rate in the first year to 7% in subsequent years

Capital Gain Tax (CGT): the relief period has been reduced from 7 years to 4 years

Mortgage Interest Relief: this scheme has been extended by 3 years to 2020 but with yearly reductions: relief in 2017 and now 2018 will be 75%, 50% in 2019 and 25% in 2020

Home Carer Tax Credit: this will increase by €100 from €1,100 to €1,200

Paycheck Plus, Your Irish Payroll Processing Team

Paycheck Plus is an award-winning outsourced payroll provider, serving businesses across Ireland and the UK. With industry-leading accuracy levels, strict levels of confidentiality and top-rated payroll processes, we provide comprehensive, ISO and ISAE 3402 accredited, payroll outsourcing services to organisations of all sizes.

Our highly experienced payroll processing experts can help you to navigate all aspects of local taxation and to meet your legal requirements, including payroll consultancypayroll audits, payroll reporting, payroll trainingcompany set-up and wind-down, and special projects.

To ensure payroll accuracy or for more information simply request a callback now or call our Irish payroll bureau  on +353 (0) 1 905 9400

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