Glossary

Irish tax, word by word

125 terms explained plainly, with the current figures.

A

Additional Superannuation Contribution (ASC): A contribution deducted from public servants' pay towards their pensions.
Additional voluntary contributions (AVCs): Extra contributions on top of your workplace pension, with the same tax relief.
Allowable expenses: Business costs you can deduct from income: those spent wholly and exclusively for the business.
Allowable rental expenses: Costs a landlord can deduct from rent.
ARF: Approved Retirement Fund: an investment account for your pension after retirement, instead of buying an annuity.
Auto-enrolment: The workplace pension scheme employees are automatically joined to from 2026 if they have no pension.

B

Balance of tax: What's left to pay for a year once preliminary tax and tax deducted at source are taken off.
Base cost: What an asset cost you, for Capital Gains Tax.
Benefit in kind (BIK): The taxable value of perks your employer gives you.
Bonus tax: Bonuses are taxed like ordinary pay, at your marginal rate.

C

Capital Acquisitions Tax (CAT): Tax on gifts and inheritances above your lifetime threshold, at 33%.
Capital allowances: Tax relief on equipment and vehicles, spread over eight years.
Capital Gains Tax (CGT): Tax on the gain when you sell or give away an asset: 31% for disposals from 7 October 2026, 33% before.
Capital loss: A loss on disposing of an asset, which can reduce other gains.
CGT annual exemption: The first €1,270 of chargeable gains each year is tax-free.
CGT return: Reporting a disposal on Form 11 or Form CG1 by 31 October of the next year.
Chargeable gain: The gain that Capital Gains Tax is charged on, after costs and reliefs.
Chargeable person: Someone who must register for self-assessment and file a Form 11.
Claiming a credit or relief: How to ask Revenue for a credit or relief you're entitled to.
Company car BIK: Tax on the private use of a company car, based on its value, emissions and business mileage.
Credits against tax: Credits come off income tax only; they can't create a refund on their own or reduce USC or PRSI.
Cumulative basis: How PAYE normally works: each payslip looks at your pay and tax for the whole year so far.

D

Deemed disposal: Paying exit tax on a fund every eight years as if you'd sold it, even if you haven't.
DIRT: Deposit Interest Retention Tax: 33% taken from interest on Irish savings accounts.
Disposal: Selling, giving away, exchanging or losing an asset, for Capital Gains Tax.
Dividend withholding tax (DWT): Tax at 25% taken from dividends paid by Irish companies.
Domicile: Your permanent home country in law, which can change how foreign income is taxed.

E

Emergency tax: Higher tax deducted when your employer has no payroll notification for you.
Employee share purchase plan: A plan letting employees buy company shares, often at a discount.
Employee tax credit: A credit for PAYE employees: 20% of pay, up to €2,000 in 2026.
Employer match: An employer contribution that matches what you pay, up to a set level.
Employer pension contribution: What your employer pays into your pension, usually free of tax for you.
Employment status: Whether you're an employee or self-employed, which decides how you're taxed.
ESPP: Employee stock purchase plan: the US name for an employee share purchase plan.
ETF: An exchange-traded fund (ETF). ETFs based in the EU are taxed under the exit tax rules, not Capital Gains Tax.
Exit tax: Tax on gains and distributions from investment funds and life policies: 38% in 2026, 35% from 2027.

F

First Home Scheme: A State-backed shared equity scheme that funds part of a new home's price.
Flat rate expenses: Fixed allowances some workers can claim for work costs, without receipts.
Form 11: The income tax return for the self-employed and other chargeable persons.
Form 12: The income tax return for PAYE workers.

G

Gross pay: Your pay before any deductions.
Gross rental receipts: All the rent you're due in the year, before expenses.

H

Health insurance as a benefit: Employer-paid health insurance is a taxable benefit, but you can claim tax relief on it.
Help to Buy: A refund of income tax and DIRT (tax on savings interest) towards a first-time buyer's deposit on a new home. Up to €35,000 after Budget 2027.
Home Carer Tax Credit: A credit for a married couple where one spouse cares for a child, an older person or someone with a disability at home.

I

Income tax: Tax on income at 20% up to your rate band and 40% above it, less your tax credits.
Inflation: The rise in prices over time, which reduces what money buys.
Insurable employment: Work that's covered by PRSI, so your contributions count towards benefits.
Interest on late payment: Interest Revenue charges for each day tax is paid late.

J

Joint assessment: How most married couples and civil partners are taxed: incomes combined, credits and bands shared.

L

Late filing surcharge: An extra charge added to your tax when a return is filed late.
Local Property Tax (LPT): A yearly tax on residential property, based on its value band.

M

Marginal tax rate: The tax you pay on your next euro of income.
Medical expenses relief: Tax relief at 20% on qualifying health costs not covered by insurance.
Mortgage: A loan secured on property, repaid with interest over a set term.
Mortgage overpayment: Paying more than the required repayment to clear the loan sooner.
myAccount: Revenue's online service for individuals and PAYE workers.

N

Net pay: What reaches your bank account after tax, USC, PRSI and other deductions.
Net rental profit: Rent less allowable expenses and capital allowances (the cost of furniture written off over several years): the figure you're taxed on.

O

Occupational pension: A pension scheme set up by your employer.
Overtime: Extra pay for extra hours, taxed at your marginal rate.

P

Pay and file: The yearly deadline when the self-assessed file last year's return and pay last year's balance and this year's preliminary tax.
PAYE: Pay As You Earn: the system that takes income tax, USC and PRSI from your wages before you're paid.
PAYE exclusion order: Revenue's permission for an employer not to operate PAYE on some pay, usually for work abroad.
Paying CGT: Capital Gains Tax (CGT) is due by 15 December for disposals in January to November, and by 31 January for December disposals.
Pension earnings cap: Pension tax relief only applies to contributions on earnings up to €115,000 a year.
Pension gap: The difference between the retirement income you'll have and the income you want.
Pension tax relief: Your pension contributions come off your income before income tax, so they cost less than they seem.
Personal tax credit: The credit everyone gets: €2,000 for a single person in 2026, €2,125 in 2027.
Preliminary tax: Your payment on account of this year's tax, due by 31 October.
Preliminary tax options: The three ways to work out a safe amount of preliminary tax: 90%, 100% or 105%.
Principal private residence: Your only or main home.
Principal private residence relief: The Capital Gains Tax exemption when you sell your main home.
Professional services withholding tax (PSWT): Tax at 20% taken from fees paid by public bodies for professional services.
PRSA: Personal Retirement Savings Account: a portable personal pension.
PRSI: Pay Related Social Insurance: contributions that build up your right to the State Pension and other benefits.
PRSI Class A: The PRSI class for most employees.
PRSI Class S: The PRSI class for self-employed people with income of €5,000 or more.
PRSI for the self-employed: Self-employed people pay Class S PRSI through their tax return.

R

Relief at source (net pay): Pension contributions deducted through payroll before tax, so you get the relief straight away.
Remittance basis: Taxing some foreign income only when it's brought into Ireland, for residents who aren't Irish domiciled.
Remote working relief: Tax relief on part of your home electricity, heating and broadband for days you work from home.
Rent or buy: Comparing the full cost of renting with the full cost of owning.
Rent relief (old scheme): An older relief for private renters that closed to new claimants in 2011; the Rent Tax Credit is its modern replacement.
Rent Tax Credit: A credit for people renting privately: 20% of rent paid, up to €1,000 in 2026 and €1,150 in 2027.
Rent-a-room relief: Rent from a room in your own home is tax-free up to a limit: €14,000 in 2026, €16,000 from 2027.
Rental income: Rent from property, taxed as income after allowable expenses.
Retirement annuity contract (RAC): A personal pension for the self-employed and those without a workplace scheme.
Retirement lump sum: The part of your pension you can take as cash at retirement, the first €200,000 tax-free.
Revenue audit: A formal Revenue check of your returns and records.
Revenue Payroll Notification (RPN): The electronic instruction Revenue sends your employer with your credits and rate band.
ROS: Revenue Online Service: where businesses and the self-assessed file and pay.
RSU: Restricted stock units: shares granted by an employer, taxed as pay when they vest.

S

Salary sacrifice into a pension: Giving up some salary in return for an employer pension contribution.
SARP: Special Assignee Relief Programme: income tax relief for some people relocated to Ireland by their employer.
Self-assessment: The system where you work out and pay your own tax, instead of an employer doing it.
Sell to cover: Selling some vested shares straight away to pay the tax due on them.
Share options: The right to buy employer shares at a set price. Since 2024, gains are taxed through payroll.
Single Person Child Carer Credit: An extra credit and wider rate band for a single parent whose child lives with them.
Stamp duty: Tax on buying property, paid by the buyer through their solicitor.
Standard rate cut-off point: The amount of income taxed at 20% before the 40% rate starts.

T

Tax agent: An accountant or adviser registered with Revenue to act for you.
Tax band: A slice of income charged at one rate.
Tax calendar: The year's Revenue deadlines in one list.
Tax clearance: Revenue's confirmation that your tax affairs are in order.
Tax credit: An amount taken straight off your income tax.
Tax credit certificate: Revenue's statement of your tax credits and rate band for the year.
Tax deadlines: The key dates: 31 October for pay and file, 15 December and 31 January for Capital Gains Tax.
Tax deducted at source: Tax taken off income before you receive it: PAYE, DIRT (tax on savings interest), dividend withholding tax and professional services withholding tax.
Tax refund: Tax paid back when you've paid more than you owe.
Tax residency: Whether Ireland taxes you as a resident, based on days spent here.
Tax return: Your yearly statement of income, gains and reliefs to Revenue.
Tax year: In Ireland, the calendar year: 1 January to 31 December.
Taxable benefit: A non-cash perk from your employer that's taxed as if it were pay.
Taxable income: Total income after reliefs and deductions, before tax credits.
Taxable pay: The part of your pay that income tax is charged on.
Termination payment: A lump sum when a job ends, partly tax-free under set exemptions.

U

Universal Social Charge (USC): A tax on gross income (income before tax), charged in bands once your income is over €13,000 a year.
USC bands: The slices of income charged at each USC rate.
USC for the self-assessed: Self-employed people pay USC through preliminary tax and their Form 11, not through payroll.
USC surcharge: An extra 3% USC on non-PAYE income above €100,000.

V

VAT: Value-Added Tax on goods and services, charged by registered businesses.
Vesting: When shares or options from your employer become yours.

W

Wear and tear allowance: The capital allowance for plant, machinery and vehicles: 12.5% a year for eight years.
Week 1 / Month 1 basis: A non-cumulative basis: each payslip is taxed on its own, with no catch-up.