Ireland Finance Glossary
Every abbreviation you've nodded along to without actually knowing. Plain English, no jargon.
Income Tax
Pay As You Earn
Ireland's income tax system. Tax is deducted from your salary each pay period before you receive it. Rates: 20% on income up to €44,000, 40% above. Your employer pays Revenue directly.
Universal Social Charge
A separate tax on gross income (before pension deductions). Bands: 0.5%, 2%, 3%, 8%. Introduced in 2011 and still very much here. Earners under €13,000 are exempt.
Pay Related Social Insurance
Your social insurance contribution (4.35% in 2026 for Class A). Funds the state pension, jobseeker's benefit, maternity pay, and more. Your employer also pays 11.05% on top of your salary.
Benefit In Kind
Non-cash perks your employer gives you — health insurance, a company car, gym membership. Revenue treats these as income, so you're taxed on their value. Can significantly increase your effective tax rate.
Tax Credit vs Tax Relief
Credit: reduces your tax bill euro-for-euro (better). Relief: reduces your taxable income (so the saving depends on your tax rate). A €1,000 credit saves you €1,000. A €1,000 relief at 40% saves you €400.
Marginal Tax Rate
The tax rate on your next euro earned. If you're on the higher rate, your marginal rate on extra income is roughly 52% (40% PAYE + 8% USC + 4% PRSI). This matters for overtime, bonuses, and pension decisions.
Effective Tax Rate
The average rate you actually pay across all your income — not the top rate. On €60,000 your effective rate might be ~32%, even though some income is taxed at 40%. Always lower than your marginal rate.
Earned Income Credit
The self-employed equivalent of the Employee Tax Credit. Worth €2,000 in 2026. If you're PAYE you get the Employee Credit automatically. If you're self-employed you claim EIC instead.
Property & Mortgages
Loan to Value Ratio
The mortgage as a percentage of the property value. 90% LTV = 10% deposit. Central Bank rules cap first-time buyers at 90% LTV (max 3.5× income). Lower LTV = better rates. Under 80% unlocks the best deals.
Help to Buy Scheme
A government scheme giving first-time buyers a refund of income tax paid over the previous 4 years (up to €30,000) towards the deposit on a new-build. Only applies to new builds under €500,000.
Stamp Duty
A tax paid when you buy a property. Residential: 1% on the first €1 million, 2% above. Payable in full at closing — it's on top of your deposit, so budget for it separately.
Mortgage Stress Test
Lenders must check you can afford repayments at a higher rate (typically your offered rate + 2%). If you can't pass the stress test, you can't get the mortgage — regardless of your current income.
Tax Relief at Source
How Revenue applies certain reliefs (like medical expenses or pension contributions) — the relief is applied directly to the source rather than via a tax return. Makes it seamless for employees.
Approved Housing Body
Non-profit organisations that provide social and affordable housing. You apply through your local council. Rents are set below market rate, usually linked to income. Separate waitlist from council housing.
Pensions & Investments
Personal Retirement Savings Account
A flexible, portable pension product. Works whether you're employed, self-employed, or between jobs. Contributions get income tax relief at your marginal rate — one of the most tax-efficient ways to save in Ireland.
Additional Voluntary Contributions
Extra pension contributions on top of whatever your employer scheme requires. All AVCs get full marginal rate tax relief. If you're a 40% taxpayer, a €1,000 AVC costs you just €600 net. Very efficient.
Approved Retirement Fund
A post-retirement investment fund where you keep your pension pot invested and draw it down as needed. Alternative to buying an annuity. You must withdraw at least 4% per year (5% over €2M). Income is taxed as normal.
Deposit Interest Retention Tax
Tax on interest earned from bank deposits. Currently 33%. Deducted automatically by your bank before they credit interest to your account. First-time buyers can claim DIRT back on savings used as a deposit.
Capital Gains Tax
33% tax on profits from selling assets (shares, property, crypto). You get a €1,270 annual exemption per person. Your main home is exempt. Losses can offset gains. Must file and pay by 15 December.
Capital Acquisitions Tax
33% tax on inheritances and gifts above certain thresholds. Group A (parent → child): €400,000 tax-free. Group B (other relatives): €40,000. Group C (others): €20,000. Thresholds apply cumulatively over a lifetime.
ETF Taxation in Ireland
Irish ETFs are taxed at 41% (not the 33% CGT rate). Worse: after 8 years Revenue "deems" you to have sold and rebought, taxing unrealised gains. This "exit tax" is unique to Ireland and makes long-term ETF investing expensive here.
Pension Contribution Limits
Maximum pension contribution getting tax relief: 15–40% of income (rises with age). Under 30: 15%. Age 30–39: 20%. 40–49: 25%. 50–54: 30%. 55–59: 35%. 60+: 40%. Income cap: €115,000.