Catherine Ardagh (Dublin South Central, Fianna Fail)
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75. To ask the Minister for Finance the number of earners paying income tax at the top rate of income tax; the number paying at the standard rate; the number of earners not paying income tax; how this compares to the EU average; and if he will make a statement on the matter. [27858/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am informed by Revenue that the estimated number of taxpayer units subject to the higher rate of tax is 1,013,500.

The estimated number of taxpayer units subject to the standard rate is 2,216,700. Of which, an estimated 1,060,000, or 30% of all taxpayer units, do not pay income tax as their liability is fully covered by their tax credits.

An estimated additional 256,600 taxpayer units (or 7%) are exempt from income tax.

These figures are based on 2025 estimates from the Revenue tax forecasting model using latest actual data for the year 2022, adjusted as necessary for income, self-employment, and employment trends in the interim.

Married persons or civil partners who have elected or who have been deemed to have elected for joint assessment are counted as one taxpayer unit.

I would also draw the Deputy's attention to the post-Budget 2025 Ready Reckoner which provides estimates of income earners by Income Tax and Universal Social Charge rates in 2025 and is available on the Revenue Statistics webpage at:

www.revenue.ie/en/corporate/documents/statistics/ready-reckoner.pdf

In relation to the Deputy’s further question regarding comparisons of distribution of income earners to the EU average, it should be noted that personal income taxation systems across the EU can vary greatly and make accurate comparisons challenging. As the Deputy will be aware, since 1993, Ireland has operated a dual rate system of income tax. Furthermore, since 2001 Ireland has operated a tax credit system. However, many EU countries apply multi-rate systems of income tax and apply tax allowances rather than systems of tax credits. Therefore, the Department is not aware of any source or location where such data is compiled or readily available in the manner requested by the Deputy.

However, comparisons are conducted and are available in relation to many international metrics such as the tax wedge, implicit tax rate on labour percentages and revenues from taxes on labour as % of GDP in the EU.

The OECD publishes an annual Taxing Wages report. Amongst other metrics the report provides cross-country data on the 'tax wedge', a measure which accounts for the difference between labour costs and net take-home pay.

The 2025 Report shows that Ireland’s tax wedge on labour for single individuals with no children on the average wage ranks close to the OECD average and 17th lowest out of 38 OECD countries and is significantly below other advanced European economies. The analysis indicates that Ireland continues to maintain a relatively low tax wedge on labour, ensuring that the decision to work or to hire is not unduly distorted by taxation. The Report is available at the following link:

www.oecd.org/en/publications/taxing-wages-2025_b3a95829-en.html

The EU Commission also publishes an annual report on tax. It contains a survey of different tax bases and types of taxes and their role for the tax mix, with a focus on differences across countries and over time. The 2024 Report, the latest published, is available at: taxation-customs.ec.europa.eu/taxation/economic-analysis/annual-report-taxation_en.