Dáil Éireann debate -
Thursday, 6 May 1993

Vol. 430 No. 4

Written Answers. - Gross Cost of Employment.

Pat Cox

Question:

97 Mr. Cox asked the Minister for Finance if he will set out the basic data on the tax wedge between employee's take home pay and the gross cost of employment to employers, inclusive of all taxes, levies and PRSI post budget 1993; if he will compare the basic data for Ireland with other OECD countries and within that, the other EC countries; if, in respect of married and single persons, male and female, at various income levels above, below and at the appropriate average industrial wage, he will give details of the extra amount it costs an employer to pay an additional £1 in take home pay to an employee in such categories; and if he will give details, in a tabular form, in respect of the latter information of the comparative data for each of the years from 1988 to 1992 in respect of the tax wedge.

Minister for Finance (Mr. B. Ahern):

The information sought, in so far as it is available, is set out in the following tables. The information is set out on the basis of tax years since this is the format in which it is recorded. Data which would allow of a meaningful comparison with other OECD/EC countries is not readily available.

The cost to an employer for the 1993-94 tax year, of giving a £1 net increase to an employee is estimated as follows:

Single employee 1993-94 Tax Year

Single

Income Range	Tax Rate	PRSI and Levies Rate	Cost to Employer of £1 Per Week Increase
			£
Up to £3,600	Exempt	ER 14.45	1.21
		EE 5.5
£3,601 to £4,036	Marginal Relief 48%	ER 14.45	2.46
	EE 5.5
£4,037 to £4,254	27%	ER 14.45	1.70
		EE 5.5
£4,255 to £9,000	27%	ER 12.2	1.72
		EE 7.75
£9,001 to £10,936	27%	ER 12.2	1.75
		EE 8.75
£10,936 to £20,000	48%	ER 12.2	2.59
		EE 8.75
£20,001 to £21,300	48%	ER 12.2	2.30
		EE 3.25
£21,300 and over	48%	ER 0.0	2.05
		EE 3.25

Married, one spouse working

Income Range	Tax Rate	PRSI and Levies Rate	Cost to Employer of £1 Per Week Increase
			£
Up to £6,160	Exempt	ER 14.45	1.21
		EE 5.5
£6,161 to £7,200	Exempt	ER 12.2	1.22
		EE 7.75
£7,201 to £9,000	Marginal Relief	ER 12.2	2.54
	EE 7.75
£9,001 to £9,468	Marginal Relief	ER 12.2	2.59
	EE 8.75
£9,469 to £20,000	27%	ER 12.2	1.75
		EE 8.75
£20,001 to £20,786	27%	ER 12.2	1.61
		EE 3.25
£20,787 to £21,300	48%	ER 12.2	2.30
		EE 3.25
£21,301 and over	48%	ER 0.0	2.05
		EE 3.25

Tax Wedge Calculations

Tax Year	Average industrial wage factor	Total Income	Tax Wedge	Total Income	Tax Wedge
Male	Single	Married	Female	Single	Married
		£			£
1988-89	0.50	6,320.50	1.98	1.98	3,836.00	1.98	1.22
	0.75	9,480.75	2.54	1.98	5,754.00	1.98	3.40
	1.00	12,641.00	3.29	1.98	7,672.00	1.98	2.96
	1.50	18,961.50	2.46	1.98	11,508.00	2.54	1.98
	2.00	25,282.00	2.46	2.46	15,344.00	3.29	1.98
1989-90	0.50	6,562.50	1.87	3.50	3,976.50	1.87	1.22
	0.75	9,843.75	2.54	1.87	5,964.75	1.87	1.22
	1.00	13,125.00	3.10	1.87	7,953.00	1.87	1.87
	1.50	19,687.50	2.33	1.98	11,929.50	2.54	1.87
	2.00	26,250.00	2.33	2.33	15,906.00	3.10	1.87
1990-91	0.50	6,850.50	1.82	2.86	4,116.00	2.81	1.22
	0.75	10,275.75	2.55	1.81	6,174.00	2.81	1.22
	1.00	13,701.00	2.86	1.81	8,232.00	1.89	1.81
	1.50	20,551.50	2.18	1.98	12,348.00	2.53	1.81
	2.00	27,402.00	2.18	2.18	16,464.00	2.86	1.81
1991-92	0.50	7,142.00	1.80	2.82	4,301.00	1.77	1.23
	0.75	10,713.00	2.54	1.77	6,451.50	1.80	1.23
	1.00	14,284.00	2.80	1.77	8,602.00	1.80	2.80
	1.50	21,426.00	2.20	2.03	12,903.00	2.54	1.48
	2.00	28,568.00	2.20	2.20	17,204.00	2.80	1.77
1992-93	0.50	7,350.00	1.73	2.54	4,450.00	1.73	1.21
Estd.	0.75	11,025.00	2.54	1.73	6,675.00	1.73	1.02
	1.00	14,700.00	2.54	1.73	8,900.00	1.73	2.54
	1.50	22,050.00	2.02	2.02	13,350.00	2.54	1.73
	2.00	29,400.00	2.02	2.02	17,800.00	2.54	1.73
1993-94	0.50	7,850.00	1.72	2.54	4,750.00	1.72	1.21
Estd.	0.75	11,775.00	2.59	1.75	7,125.00	1.72	1.22
	1.00	15,700.00	2.59	1.75	9,500.00	1.75	1.75
	1.50	23,550.00	2.05	2.05	14,250.00	2.59	1.75
	2.00	31,400.00	2.05	2.05	19,000.00	2.59	1.75

Notes: Average industrial wage estimated on a tax year basis using CSO data on gross earnings for male and female workers (adult) in transportable goods industries. Full data are not available for 1992-93 or 1993-94 and the estimates for these years are tentative.

Married status assumes one spouse working and no children.