Tax for Teens – Part 2: When Do You Actually Start Paying Tax?

Welcome back to our Tax for Teens blog series here at Irish Tax Hub.

In Part 1, we explained the basics of income tax and why it's an essential part of how Ireland funds public services. Now we’re diving into something even more practical:

When do you actually start paying tax — and what does it look like when you do?

This post is especially useful if you’re:

• Starting your first job (part-time, summer, or after school)
• Already earning, but unsure if you're being taxed correctly
• Curious about payslips and take-home pay
• Earning independently and wondering about tax rules for side hustles

We’ll walk you through the income thresholds, explain what’s on a payslip, and show you how to avoid common mistakes like being put on emergency tax.

1. Do Teenagers Really Have to Pay Tax?

Yes — but only if your income exceeds certain limits. In Ireland, income tax applies to everyone who earns above a particular amount. That includes teenagers and students, especially if you’re working part-time or earning regularly.

However, most teens working casually or part-time won’t earn enough to pay income tax. The system is designed to make sure lower earners — including students — don’t get taxed unfairly.

That said, tax might still be deducted from your wages if your employer doesn't have your correct Revenue information. That’s why it's important to understand your tax credits, payslip, and how to register for work with Revenue.

2. What Income Is Taxed?

Income tax can apply to various forms of earnings:

• Part-time jobs (e.g., shops, cafés, retail)
• Summer or seasonal work
• Babysitting or tutoring for payment
• Freelance or gig work (e.g., TikTok, Etsy, design, music lessons)
• Online income (YouTube, content creation, affiliate links, etc.)

If you're working for an employer (e.g. Centra, McDonald's, a local café), you’ll be on the PAYE (Pay As You Earn) system. Your employer deducts tax from your pay and sends it to Revenue.

If you're earning independently (no employer involved), you may be self-employed, and you’ll need to file a tax return. We’ll explore this in Part 4.

3. How Much Can I Earn Without Paying Income Tax?

Let’s break down the key numbers for 2025.

Tax Credits for Employees

Every person who is employed is entitled to the following credits:

Credit TypeAmount (2025)Personal Tax Credit€1,875PAYE Tax Credit€1,875Total Credits€3,750

These credits reduce the amount of tax you owe. At a 20% tax rate (which applies to most incomes under €42,000), you can earn up to €18,750 per year without paying income tax.

Weekly/Monthly Breakdown

Time PeriodTax-Free Earnings (approx.)Weekly€360Monthly€1,560

So, if you’re a student earning, say, €150–€250 per week, you likely won’t owe income tax.

Important: Tax credits are applied annually, so even if you earn a lot in one summer month, you might still fall below the tax threshold by year-end.

4. But What About PRSI and USC?

Even if you don’t owe income tax, you might still have to pay:

PRSI (Pay Related Social Insurance)

• Charged at 4% on income over €352 per week
• If you earn below that, you generally don’t pay PRSI
• PRSI goes toward social benefits like pensions, unemployment payments, and maternity leave

USC (Universal Social Charge)

• First €13,000 of annual income is USC-exempt
• Over that, the rate starts at 0.5% and increases in steps
• Many teens won’t earn enough to be charged USC, but it’s worth being aware of

5. What Does a Payslip Look Like?

Once you're working, you’ll get a payslip every time you’re paid. This is a summary of your earnings and any deductions. Understanding your payslip is really important, especially when you’re just starting out.

Here’s what you’ll usually see on a payslip:

• Gross Pay – This is the total amount you earned before anything is taken off (your hourly wage × hours worked).
• PAYE – Income tax that your employer has deducted and sent to Revenue on your behalf.
• PRSI – Your social insurance contribution, which goes towards benefits like pensions and jobseeker's payments.
• USC – The Universal Social Charge, a small deduction that applies if you earn above a certain threshold.
• Net Pay – This is your actual take-home pay, after all deductions have been made.
• Tax Credits Used – This shows how much of your tax-free allowance has been applied to reduce your tax bill.

Always review your payslip. If something doesn’t look right — for example, if you’re being taxed when you shouldn’t be — it could be a sign that your job hasn’t been registered correctly with Revenue.

6. Emergency Tax – And How to Avoid It

If you don’t provide your employer with your PPS number and register your job with Revenue, you could be placed on emergency tax. This means:

• Your tax credits aren't applied
• You're taxed at the higher rate (20% or more)
• You take home much less than you should

To avoid emergency tax:

1. Register for Revenue MyAccount: https://www.revenue.ie
2. Go to the Jobs and Pensions section
3. Register your new job with your employer’s details
4. Revenue will then issue a Tax Credit Certificate to your employer

Once this is done, your employer can apply your tax credits, and your take-home pay will be correct.

7. Real-Life Example

Let’s say you work 20 hours a week at €12/hour.

• Weekly earnings: €240
• Monthly earnings: ~€1,040
• Annual earnings: ~€12,480

You are well below the €18,750 tax-free limit, so you shouldn’t pay any income tax. But if you didn’t register your job correctly, you might be put on emergency tax and lose €40–€60 from your wages every week until it’s fixed.

If that happens, don’t worry — you can claim back the overpaid tax once your details are updated.

8. What If I’m Self-Employed or Freelancing?

If you’re earning money without an employer — for example:

• Selling artwork or clothes online
• Offering tutoring or music lessons
• Running a YouTube or TikTok channel with revenue
• Doing freelance web design or writing

— you may need to register as self-employed and file your own tax return.

We’ll cover this in Part 4: Tax for Young Entrepreneurs & Creators.

Next Up in the Series:

In Part 3, we’ll explain:

• How tax is actually calculated
• What “tax bands” and “credits” really mean
• How USC and PRSI work in more detail
• Simple worked examples to show how your net pay is calculated

Got questions about your own payslip or job offer?

Get in touch with us at www.irishtaxhub.ie — or send your question anonymously through our blog.

We’re here to help make tax clear, relevant, and maybe even a bit interesting.