Self Employed – Health levy increase !

This is old news at this stage but its only coming home to bite now for any self employed people who are filing their 2009 annual return….Ouch !

The Health Levy in Ireland is really just another name for income tax that is deducted from earnings. It is supposed to be used by Department of Health and Children to fund health services in Ireland.  The recent April 2009 mini Budget doubled the rate of this Levy. (So will we see a massive improvement in Health Services? – or are we all just being fooled ?)

The following people do not pay the health levy:

  • People earning less than €500 gross per week
  • People who have a medical card
  • People getting One-Parent Family Payment, Deserted Wife’s Benefit/Allowance, the Widow’s/Widower’s Contributory Pension and the Widow’s/Widower’s Non-Contributory Pension.

If you have paid the health levy and think you should not have, you should contact your local tax office to find out how to get this money back.

The health levy was previously paid at the rate of 2% on all earnings up to €100,100 and 2.5% on earnings over €100,100.

From 1 May 2009, the health levy will be paid at the rate of:

  • 4% on all earnings up to €75,036
  • 5% on earnings over €75,036.

So someone earning 40k a year would have paid  800 euro a year – will now pay 1600 euro a year (133 euro a month) . People paying private health insurance as well must be thinking why are they paying twice.