Finance Minister Pascal Donohoe and Public Expenditure Minister Michael McGrath outlined the details in the Dáil this on 12th of October.
The Government has unveiled a €17.75 billion budget package in the Dail.
The Employment Wage Subsidy Scheme EWSS will now remain in place to the end of 2021.
An employer is permitted to make tax free payment of up to €3.20 per working day to e-workers to cover additional utility costs incurred by employees working from home. Where an employer does not pay €3.20 to an e-worker, the employee is entitled to make a claim for tax relief in respect of the light and heat expenses. For 2020, broadband costs will also be allowable in respect of employees working from home. In addition, tax relief can be claimed in respect of any expenses incurred wholly, necessarily and exclusively in the performance of duties.
National Minimum Wage
The National Minimum Wage will increase by 10 cent from €10.10 to €10.20 gross per working hour in respect of hours worked on or after 1st January 2021.
Dependent Relative Tax Credit
The Dependent Relative Tax Credit will be increased by €175 from €70 to €245.
Sea-going Naval Personnel Tax Credit
The Sea-going Naval Personnel Tax Credit will be increased by €230 from €1,270 to €1,500.
Universal Social Charge (USC)
There was no change to the USC exemption threshold of €13,000.
The threshold for the 2% rate will be increased by €203 from €20,484 to €20,687 in line with the increase in the national minimum wage. As a result, the amount of income liable to USC at 4.5% reduces from €49,560 to €49,357. There has been no change to the rates of USC.
For 2021, USCwill apply at the following rates for those earning in excess of €13,000:
Rate Bands Rate
Up to €12,012 0.5%
Next €8,675 2%
Next €49,357 4.5%
Medical card holders and individuals aged 70 years and over whose aggregate income does not exceed €60,000 will continue to pay a maximum USC rate of 2% in 2021.
PRSI The weekly threshold for the higher rate of employer PRSI under Class A will increase from €395 to €398 in line with the increase in the national minimum wage. This will ensure that an employer will pay the reduced rate of employer PRSI of 8.8% in respect of an employee working a 39 hour week who is paid the national minimum wage.