What is a PAYE credit?

The PAYE credit (also called the Employee Tax Credit) reduces the income tax owed by employees who pay tax through the PAYE system.

• The credit is €2,000 for 2025.
• You must have income taxed under PAYE (e.g. wages or salary).
• You don’t qualify if you’re self-employed or a proprietary director (someone who owns more than 15% of a company).
• If jointly assessed, both spouses can claim the PAYE credit if eligible.

The credit only reduces your income tax—if your tax bill is less than €2,000, you only get credit for that amount.