Employees filing a single or a parent computation who earn less than €9,100 or €10,500 respectively every year and couples submitting a joint computation and earn less than €12,700 will not pay income tax any longer.

Less tax will be paid by those who earn below €19,500, €28,700 and €21,200 in the three scenarios respectively. This measure seeks to address employees who have not benefitted from the income tax changes rolled out over these last years that led to a reduction to 25 per cent from 35 per cent in the maximum tax rate for persons earning an annual income below €60,000. A total of 40,000 individuals benefitted.

According to the new regime, employees who file a single declaration and earn between €9,100 and €19,500 will save up to €90 in tax.

Single persons whose annual income is between €10,500 and €21,200 and file a parent declaration will have their tax reduced by up to €105.

Couples submitting a joint declaration and whose income ranges between €12,700 and €28,700 will be see their tax bill cut by up to €120.

A couple where both partners are employed and submit a single declaration will save up to €180 between them. This will rise to €210 when their maximum income amounts to €21,000 each.

People on minimum wage and pensioners falling within the same category will remain untaxed.

The formula for the new income tax regime, benefitting close to 160,000 people, is the following:

Single rate

Married rate

Parent rate