Example of a family’s tax for 2025 income

Here is an example of how the tax for a typical family would be worked out, bearing in mind the different systems described on the previous pages. 

A married couple with two children have 3 parts (see the earlier section in this chapter, 'Tax bands and the family 'parts'). 

If their combined net taxable income, after deduction of the standard 10% allowance for expenses is €60,000, we can calculate as follows:

Divide the income of €60,000 by 3 (as 3 parts) = €20,000. Then apply the tax bands and multiply the tax back up by the 3 parts. 

€924 x 3 = €2,772 

Total tax to pay: €2,772

A saving results from the fact that more of the income has the lowest band rates applied to it than would be the case without the family quotient. 

For a single person with an income of €60,000, this income would rise into the 30% tax band, resulting in a tax liability of €11,104.

How tax credit is calculated for foreign income

Here is an example of how the tax credit system works where €20,000 of the total €60,000 income was from UK rental income (the credit lowers the tax in proportion to the relationship of foreign ‘tax credit’ income to total income). 

Take total tax x (‘tax credit’ income divided by total income), in this case: 

€2,772 x (20,000/60,000) = €924

This amount is then deducted from the total liability [€2,772 - €924] so as to leave a tax liability of €1,848