1) How much can a sole trader earn before paying tax?


The absolute maximum you can get paid before paying tax is €5,000 (assuming you have no other income.

Otherwise, it really depends what type of tax you are talking about – let’s see the limits for each one:


2) VAT (Value-added Tax)


You have to register, charge and remit VAT to Revenue if you surpass the following sales thresholds:

  • Services – €37,500 in sales within a 12-month rolling period
  • Goods – €75,000 in sales within a 12-month rolling period


3) Income Tax (PAYE – Pay As You Earn)


In 2020, as a self-employed trader you can claim an Earned Income tax credit of €1,500 (however, if you also qualify for the PAYE tax credit, the combined value of these 2 tax credits cannot exceed €1,650). You can also get a Single Person Tax credit of €1,650. In Ireland, the standard tax rate band €35,300 (taxed at 20%, after that the tax rate is 40%). Theoretically this means that you could earn €15,750 before paying income tax.


4) USC (Universal Social Income)


You do not pay the Universal Social Charge if your income for a year does not exceed €13,000.


5) PRSI (Pay-related Social Insurance)


If you earn less than €5,000 from self-employment in a year you are exempt from paying Class S PRSI (but you may pay €500 as a voluntary contributor).

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Mark Sweetman, ACA

Mark Sweetman, ACA

As a Chartered Accountant I've built my experience working within the SaaS and digital technology industries, growing early-stage businesses from the inside. I help digital entrepreneurs understand their companies and ensure they have all the tools they require to succeed and thrive. I love adopting new tech solutions and making use of these to increase efficiency within our clients' businesses.