Jim, aged 68, is married. He is jointly assessed. He has 2 dependent children and income of €38,000 for 2024. He is allowed a total tax credit of €6,115 which is made up of the following:
Jim's total credits
Credits | Amount |
Personal tax credit |
€3,750 |
PAYE tax credit |
€1,875 |
Age tax credit |
€490 |
Total |
€6,115 |
The exemption limit that applies to him is €37,150 (€36,000 + €575 + €575) as he is jointly assessed with two dependent children.
He is not entitled to the Income Tax exemption as his income is greater than his exemption limit. However, his income is less than twice his exemption limit so marginal relief may apply.
If marginal relief was not applied, Jim’s tax liability would be calculated as follows:
Taxed under normal system (20%)
Total income | €38,000 |
Tax @ 20% |
€7,600 |
Less tax credits |
€6,115 |
Tax due |
€1,485 |
If marginal relief was applied, Jim’s tax liability would be calculated as follows:
Taxed under marginal relief (40%)
Total income | €38,000 |
Less exemption |
€37,150 |
Excess |
€850 |
Tax due @ 40% |
€340 |
In this case, marginal relief is more beneficial to Jim than using his tax credits. Revenue will grant Jim marginal relief and his Income Tax liability for 2024 will be €340.