A Financial Planners Guide to Budget 2025

Every year the Government’s Budget is widely anticipated by many who eagerly await the key changes to spending and how they will be impacted on a personal level but also for business owners, on a professional level. 

On Monday, October 1st 2024, the Irish Government officially rolled out Budget 2025 breaking down budget allocations for the year ahead across a variety of industries and sectors. 

To make it easier to digest, we have summarised the key takeaways that you should be aware of, helping you to better inform your financial management and tax planning for the New Year. 

Budget 2025 & Personal Finance 

Income and Taxation

A tax package of €1.6 billion has been allocated by the Government in respect of personal taxation for 2025, with changes including Income Tax, USC and PAYE. 

Income Tax 

One of the most significant and notable changes that was made in Budget 2025 was the income tax rate. 

Previously, the income tax bands were as follows:

• Standard Rate Cut-Off Point: 20% up to €42,000
• Higher Rate: 40% on €42,000 or more. 

However, starting next year, the new rate of income tax will be:

• Standard Rate Cut-Off Point: 20% up to €44,000
• Higher Rate: 40% on €44,000 or more. 

USC

Irish workers can now expect to see another increase in their take-home earnings as in addition to changes to income tax, USC will be cut from 4% to 3%, with the entry threshold increasing to €27,382, rising by €1,622. 

PAYE

PAYE tax credits have also been given a boost in this budget, with each text credit receiving an additional €125, increasing from €1,872 to €2,000. 

Social Welfare 

Social Welfare and Protection was issued a tax package of a total of 2.2 billion in Budget 2025, with the core change being an increase to all social welfare benefits by €12 per week.

In addition, the package will also see: 

• A double payment in October to people in receipt of a qualifying social welfare payment.
• An increase in the Carer’s Support Grant to €2,000
• The Carer’s Benefit extended to the self-employed
• Those living alone will get a one-off payment of €200

Auto-Enrolment Scheme 

The proposed Auto-Enrolment Scheme, a pension scheme created by the government in an attempt to have workers less reliant on the State Pension and build better wealth for retirement is expected to be introduced from 30 September 2025. 

Children & Education 

There were a number of changes implemented for the support of children in addition to improving education across Ireland in the latest budget which will include:

• Two double child benefit payments before the end of the year. 
• A new one-off payment for parents of newborns of €420
• An additional €15 a week for maternity and paternity leave and child benefit
• Drop in third-level student and apprentice contribution fees by €1,000

Capital Acquisition Tax (Inheritance tax)

Prior to the Budget, it was speculated that there would be some level of change implemented regarding Inheritance Taxation, which was since announced on Monday.

In Category A, where inheritance passes from parent to child, there will be an increase to the threshold to €400,000 

In Category B, the threshold increased from €32,500 to €40,000 and in Category C, from €16,250 to €20,000.

Where the threshold is exceeded, the CAT Tax Rate will remain at 33%. 

Budget 2025 For Businesses

Minimum Wage

The National Minimum Wage will see workers earning €13.50 per hour, increasing by 80c. 

Employee Bonuses 

Employers, should they choose to provide bonuses, will now have the ability to provide employees with a tax-free bonus up to €1,500.

Taxation

There were several taxation updates that as a business owner you should be aware of, specifically surrounding Capital Gains and R&D tax credits. 

For business owners selling their companies, if the sale is over €10 million, there is a 12-year period where some relief might have to be repaid. The higher age limit for claiming this relief remains the same.

Investors in innovative start-ups can now also avail of Capital Gains Tax Relief, with tax-free gains of up to €10 million. 

Smaller R&D projects or new applicants may also be eligible for a new tax credit, with the first-year payment limit being increased from €50,000 to €75,000 in Budget 2025. 

Supports and Incentives

The Employment Investment Incentive (EII) and Start-Up Relief programs have been extended until 2026, with the maximum amount investors can claim under EII doubled from €500,000 to €1 million.

Relief available under Start-Up Relief for Entrepreneurs increased from €700,000 to €980,000.

VAT Registration

The thresholds for VAT registration are set to increase to €85,000 for goods and €42,500 for services.

Stock Exchange

There will also be an introduction of a form of relief to help businesses cover the cost of their first listing on the Irish or European stock exchange (this will be up to €1 million)

National Training Fund

With a surplus in the National Training Fund after the increased numbers at work in addition to PRSI receipts from employers, the fund will be used over the next six years in a programme that will seek to support healthcare, veterinary training, PhD stipends and the craft apprenticeship system. 

There have been quite a number of changes being implemented as a result of Budget 2025, both on a personal level and professional business level.

If you need expert, knowledgable industry advice from Certified Financial Planners™ about what these changes mean for you talk to our team for tailored advice and planning today.

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