Dáil Éireann debate -
Tuesday, 3 Dec 2002

Vol. 558 No. 4

Written Answers. - Tax Code.

Paul McGrath

Question:

205 Mr. P. McGrath asked the Minister for Finance the tax paid by a single income married couple with gross income of ?56,000 in 2002; if he will compare this amount to that paid by a double income married couple with each earning ?28,000 per annum, one earning ?37,000 and the other earning ?19,000, assuming in all cases no dependent children or other additional tax credits. [24820/02]

Minister for Finance (Mr. McCreevy)

The position is that the tax rates and bands for a married couple for 2002 are as follows: Married couple, one spouse with income – first €37,000 @ 20%, balance @ 42%; married couple, both spouses with income – first €37,000 with increase of €19,000 maximum @ 20%, balance @ 42%.

In the case of married couples with two incomes the standard rate band available to one spouse will not be greater than that available to a one income married couple i.e. €37,000. The second spouse may avail of the balance of the €56,000 band.

The following six examples show the income tax payable by single and double income families as requested by the Deputy on a gross income of €56,000 for the current tax year. The examples refer to earners in the PAYE and self-employed sectors and are based on the assumption in each case that the married couple are jointly assessed for tax purposes.

Example 1

In this example it is assumed that the individual is in the PAYE system.

One Income Family with no dependent children

Gross Income	€56,000
Band Available	€37,000
Band Utilised	€37,000
Tax	€37,000 @ 20% =	€7,400
	€19,000 @ 42% =	€7,980
Gross Tax Due		€15,380
Less Tax Credits	Personal Credit	(€3,040)
	Employee Credit	(€660)
= Total Credits		(€3,700)
Net Tax Due		€11,680

Example 2

In this example it assumes that both spouses are working in the PAYE sector.

Two Income Family with no dependent children and income split between spouses €28,000: €28,000.

Joint Income	€56,000
Spouses Income	€28,000		€28,000
Band Available	€28,000		€28,000
Band Utilised	€28,000		€28,000
Tax liability	€5,600	(€28,000 @20%)	€5,600 (€28,000 @20%)
Gross Tax Due	€11,200
Less Tax Credits
	(€1,520)	personal credit	(€1,520)
	(€660)	employee credit	(€660)
	(€2,180)		(€2,180)
= Total credits	(€4,360)
Net Tax Due	€6,840

Example 3

In this example it is assumed that both spouses are in the PAYE

system.

Two Income Family with no dependent children and income split between spouses €37,000: €19,000.

Joint Income	€56,000
Spouses Income	€37,000	€19,000
Band Available	€37,000	€19,000
Band Utilised	€37,000	€19,000
Tax Liability	€7,400 (€37,000 @20%)	€3,800 (€19,000 @20%)
Gross Tax Due	€11,200
Less Tax Credits
	(€1,520) personal credit	(€1,520)
	(€660) employee credit	(€660)
= Total Credits	(€4,360)
Net Tax Due	€6,840

Example 4

In this example it is assumed that the earner is self-employed.

One Income Family with no dependent children.

Gross Income	€56,000
Band Available	€37,000
Band Utilised	€37,000
Tax	€37,000 @ 20% =	€7,400
	€19,000 @ 42% =	€7,980
Gross Tax Due		€15,380
Less Tax Credits	Personal Credit	(€3,040)
Net Tax Due		€12,340

Example 5

In this example it assumes that each spouse is self employed.

Two Income Family with no dependent children and income split between spouses €28,000: €28,000.

Joint Income	€56,000
Spouses Income	€28,000	€28,000
Band Available	€28,000	€28,000
Band Utilised	€28,000	€28,000
Tax liability	€5,600 (€28,000 @20%)	€5,600 (€28,000 @20%)
Gross Tax Due	€11,200
Less Tax Credits
	(€1,520)personal credit	(€1,520)
= total credits	(€3,040)
Net Tax Due	€8,160

Example 6

In this example it is assumed that both spouses are self-employed.

Two Income Family with no dependent children and income split between spouses €37,000:€19,000.

Joint Income	€56,000
Spouses Income	€37,000	€19,000
Band Available	€37,000	€19,000
Band Utilised	€37,000	€19,000
Tax Liability	€7,400 (€37,000 @20%)	€3,800 (€19,000 @20%)
Gross Tax Due	€11,200
Less Tax Credits
	(€1,520)personal credit	(€1,520)
= Total Credits	(€3,040)
Net Tax Due	€8,160