When you start a new job in Ireland and end up on emergency tax, you'll encounter two distinct tax calculation methods: Week 1 (or Month 1) basis and Cumulative basis. Understanding the difference between these two systems is crucial because it directly impacts how much tax you pay each week and, ultimately, how much you could be owed in an emergency tax refund. Many Irish workers lose hundreds or even thousands of euros simply because they don't understand which basis they're on and what it means for their take-home pay.
What Is Week 1 Basis in Irish Emergency Tax?
Week 1 basis (also called Month 1 basis for monthly paid employees) is a temporary tax calculation method where your tax credits and rate bands are applied only to that specific pay period, without considering what you've earned or been taxed on previously in the year. Each week or month is treated as an isolated event, as if it's the first week or month of the tax year.
When you're on Week 1 basis under emergency tax in Ireland, Revenue applies a limited set of tax credits to each weekly payment. For 2025, you receive 1/52nd of the annual personal tax credit (€1,775) per week, which works out to approximately €34.13 per week. This means that regardless of how much tax you've already paid this year or what tax credits you're entitled to, you only get this small weekly credit applied.
Key Point: Week 1 basis never "catches up" with your full entitlements. Each week stands alone, which is why overpayments accumulate quickly when you should be entitled to more credits or a different rate band.
What Is Cumulative Basis in Irish Tax?
Cumulative basis is the standard method of calculating tax in Ireland for most employees with proper tax documentation. Under this system, your tax is calculated by looking at your total earnings from January 1st to the current pay period, applying your full annual tax credits and rate bands proportionally, and then subtracting any tax already paid.
This system automatically adjusts for any overpayments or underpayments from previous weeks in the same tax year. If you paid too much tax in one week, the cumulative system will give you relief in subsequent weeks. If you paid too little, it will gradually collect the shortfall. This self-correcting feature makes cumulative basis much fairer and more accurate over time.
For 2025, a single person on cumulative basis with a standard tax credit certificate would have access to their full €1,775 personal tax credit and €42,000 standard rate cut-off point (for a single person). As each week passes, more of these credits become available proportionally.
The Critical Differences: Week 1 vs Cumulative
How Emergency Tax Applies Differently
When you're placed on emergency tax when starting a new job in Ireland, you'll typically be on Week 1 basis. This is where the problems begin. During the first four weeks, you'll pay 20% tax on your income after receiving only the basic weekly tax credit. After four weeks, if your tax status hasn't been corrected, you'll move to paying 40% tax on your entire income, still on Week 1 basis.
The cumulative basis, by contrast, would spread your annual tax credits and rate bands across the entire year, ensuring you only pay higher rates on income that genuinely exceeds your annual thresholds. This is why workers on emergency tax Week 1 basis often pay far more tax than necessary.
Tax Credit Application
| Tax Basis | Weekly Tax Credit (2025) | Cumulative Adjustment |
|---|---|---|
| Week 1 Basis | €34.13 per week (fixed) | No adjustment for previous weeks |
| Cumulative Basis | €34.13 × number of weeks worked | Automatically adjusts based on year-to-date |
Real-World Examples: The Financial Impact
Example 1: Week 1 Basis Emergency Tax Scenario
Sarah's Situation:
- Started new job in March 2025, earning €800 per week
- No P45 from previous employer provided
- Placed on Week 1 basis emergency tax
- Works for 12 weeks before tax status corrected
Tax Calculation on Week 1 Basis:
- Weeks 1-4: €800 - €34.13 credit = €765.87 taxable at 20% = €153.17 tax per week
- Weeks 5-12: €800 taxable at 40% (no credit applied) = €320 tax per week
- Total tax paid over 12 weeks: (€153.17 × 4) + (€320 × 8) = €613 + €2,560 = €3,173
Correct Tax on Cumulative Basis:
- Total income: €9,600 over 12 weeks
- Tax credits accumulated: €34.13 × 12 = €409.56
- Standard rate band available: €42,000 ÷ 52 × 12 = €9,692
- All income falls within 20% band: (€9,600 × 20%) - €409.56 = €1,920 - €409.56 = €1,510.44
Sarah's Emergency Tax Refund Due: €3,173 - €1,510.44 = €1,662.56
Example 2: Cumulative Basis with Job Change
Michael's Situation:
- Changed jobs in June 2025, earning €950 per week in new role
- Provided P45 showing €18,000 earned and €3,200 tax paid in previous job
- Correctly placed on cumulative basis from week 1
Tax Calculation on Cumulative Basis (after 8 weeks):
- New job earnings: €950 × 8 = €7,600
- Year-to-date total: €18,000 + €7,600 = €25,600
- Year-to-date tax due: (€25,600 × 20%) - (€1,775 × 30/52 weeks) = €5,120 - €1,024 = €4,096
- Tax already paid: €3,200
- Tax due for 8 weeks: €4,096 - €3,200 = €896 (€112 per week average)
Because Michael was on cumulative basis, the system automatically accounted for his previous earnings and tax paid, ensuring he wasn't overtaxed in his new job. This is exactly how the system should work.
Example 3: Extended Week 1 Basis Scenario
Jennifer's Situation:
- Started first job in Ireland in January 2025, earning €700 per week
- Delayed registering with Revenue
- Remained on Week 1 emergency tax for 20 weeks
Tax Paid on Week 1 Emergency Basis:
- Weeks 1-4: (€700 - €34.13) × 20% = €133.17 per week = €532.68 total
- Weeks 5-20: €700 × 40% = €280 per week = €4,480 total
- Total tax paid: €5,012.68
Correct Tax on Cumulative Basis (20 weeks):
- Total income: €700 × 20 = €14,000
- Tax credits available: €1,775 × 20/52 = €682.69
- All within standard band: (€14,000 × 20%) - €682.69 = €2,117.31
Jennifer's Emergency Tax Refund Due: €5,012.68 - €2,117.31 = €2,895.37