How much should a sole trader in Ireland set aside for tax?

As a sole trader in Ireland, you pay Income Tax, USC (Universal Social Charge), and PRSI Class S. Together, these can amount to 30–55% of your profits depending on your income level. Approximate effective rates for 2024: - Profit up to ~€18,000: very low overall rate (tax credits absorb most tax) - Profit €18,000–€42,000: approximately 26% effective rate (20% IT, 4% PRSI, 2% USC) - Profit €42,000–€70,000: approximately 48–52% on additional income (40% IT + USC at higher bands + PRSI) - Profit above €100,000: approximately 55%+ including USC self-employed surcharge A safe rule of thumb: set aside 30% of each payment you receive for tax. This is conservative for lower earners and tight for higher earners — adjust based on your actual income level and situation. Consider opening a dedicated tax savings account and transferring 30% of each invoice you receive into it automatically.

• Combined: Income Tax + USC + PRSI Class S = 30–55% depending on income
• Basic rate band (~€18,000–€42,000): approximately 26% effective rate
• Higher rate income (above €42,000): approximately 48–52% effective rate
• Rule of thumb: set aside 30% of every payment received
• Use a separate tax savings account and transfer automatically on receipt of income