Overview: Similar But Different
Ireland and the UK share a common travel area and many cultural ties, but their tax systems have diverged significantly. Both use progressive income tax with additional social charges, but the thresholds, rates, and structures differ considerably.
Ireland has a simpler two-rate income tax system (20%/40%) but adds USC (Universal Social Charge) and PRSI. The UK uses more tax bands but with generally higher thresholds before top rates apply.
Quick Comparison at €75,000 (~£63,000) Salary
| Metric |
🇮🇪 Ireland |
🇬🇧 UK |
| Gross Salary |
€75,000 |
£63,000 |
| Income Tax |
~€21,600 |
~£12,432 |
| Social Charges |
~€6,200 (USC + PRSI) |
~£5,300 (NI) |
| Total Tax |
~€27,800 |
~£17,732 |
| Net Take-Home |
~€47,200 |
~£45,268 (~€52,600) |
| Effective Rate |
~37% |
~28% |
Key Insight
- Ireland's 40% rate starts early: At just €42,000 (single) vs UK's 40% at £50,271
- USC adds up: Ireland's Universal Social Charge (0.5%-8%) significantly increases effective rates
- UK wins at middle incomes: Higher thresholds mean more income taxed at lower rates
- Tech workers note: Ireland's €100k+ salaries can face 52%+ marginal rates
Tax System Comparison
Income Tax Structure
| Feature |
🇮🇪 Ireland |
🇬🇧 UK |
| Tax-Free Allowance |
€18,000 (via tax credits) |
£12,570 |
| Number of Brackets |
2 (20% and 40%) |
4 (20%, 40%, 45%, 45%*) |
| Basic Rate |
20% (up to €42,000) |
20% (up to £50,270) |
| Higher Rate |
40% (above €42,000) |
40% (£50,271-£125,140) |
| Top Rate |
40% (no higher band) |
45% (above £125,140) |
| Additional Social Charges |
USC (0.5-8%) + PRSI (4%) |
National Insurance (12%/2%) |
*UK has a 60% effective rate trap between £100k-£125k due to personal allowance withdrawal
Ireland Tax Bands (2024/25)
| Income Band |
Income Tax |
USC |
PRSI |
| €0 - €12,012 | 20% | 0.5% | 4% |
| €12,013 - €22,920 | 20% | 2% | 4% |
| €22,921 - €42,000 | 20% | 4% | 4% |
| €42,001 - €70,044 | 40% | 4% | 4% |
| Over €70,044 | 40% | 8% | 4% |
Ireland Marginal Rates: 24.5% → 26% → 28% → 48% → 52%
UK Tax Bands (2024/25)
| Income Band |
Income Tax |
National Insurance |
| £0 - £12,570 | 0% | 0% |
| £12,571 - £50,270 | 20% | 12% |
| £50,271 - £125,140 | 40% | 2% |
| Over £125,140 | 45% | 2% |
UK Marginal Rates: 0% → 32% → 42% → 47%
Note: £100k-£125k faces effective 60% rate due to personal allowance withdrawal
Who Wins at Different Income Levels?
Low Income (Under €40,000/£34,000)
Winner: Similar - Slight Edge to UK 🇬🇧
Both countries tax lower incomes similarly. Ireland's tax credits provide relief, but USC still adds up. The UK's higher personal allowance (£12,570) and single NI rate structure is simpler and often slightly better.
Middle Income (€50,000-€80,000 / £42,000-£67,000)
Winner: UK 🇬🇧
This is where the UK clearly wins. Ireland's 40% rate kicks in at €42,000, plus USC reaches 4%, creating a 48% marginal rate. The UK's 40% rate doesn't start until £50,271, meaning more income is taxed at 20%.
High Income (€100,000-€150,000 / £84,000-£126,000)
Winner: UK 🇬🇧 (with caveats)
Ireland faces a brutal 52% marginal rate above €70k (40% income tax + 8% USC + 4% PRSI). The UK's 42% marginal rate is more forgiving, BUT beware the £100k-£125k trap where effective rates hit 60%. Above £125k, the UK returns to 47%.
Very High Income (€200,000+ / £168,000+)
Winner: UK 🇬🇧
Ireland's flat 52% marginal rate continues indefinitely. The UK's 47% top rate (45% income tax + 2% NI) is lower. However, if you're a business owner, Ireland's 12.5% corporation tax could make it more attractive to structure income through a company.
The Bottom Line
- Employees: UK generally offers lower taxes at most income levels
- Business owners: Ireland's 12.5% corp tax can offset higher personal rates
- Tech workers: Ireland's high salaries may offset higher tax rates
- Investors: UK wins with lower CGT (10-20% vs 33%)
Cost of Living Consideration
Tax rates don't tell the whole story. Cost of living significantly impacts actual purchasing power:
| Expense |
🇮🇪 Dublin |
🇬🇧 London |
| Rent (1BR City Center) |
~€2,100/month |
~£2,000/month (~€2,300) |
| Rent (1BR Outside Center) |
~€1,600/month |
~£1,500/month (~€1,740) |
| Groceries |
Similar |
Slightly cheaper |
| Healthcare |
Free GP cards for low income |
Free NHS for all |
| Public Transport |
Cheaper (Dublin Bus) |
Expensive (TfL) |
Dublin and London have similar (expensive) costs of living. Outside major cities, both countries become much more affordable. The UK has more regional variation with significantly cheaper options in the North.
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