Changing jobs in Ireland is an exciting milestone, but it comes with important tax implications that many people overlook. Whether you're moving to a new employer, taking a career break, or leaving the workforce temporarily, understanding how to properly manage your tax credits and avoid overpaying tax is crucial. Each year, thousands of Irish workers miss out on significant tax refunds simply because they weren't aware of how job changes affect their tax position. This comprehensive guide will walk you through everything you need to know about managing your tax affairs when changing jobs in Ireland.
Understanding Tax Credits When Changing Jobs
When you change jobs in Ireland, your tax credits don't automatically transfer to your new employer. This is one of the most common misconceptions that leads to workers overpaying tax, sometimes for months before they realize there's a problem. Your tax credits and rate bands determine how much tax you pay, and if they're not properly allocated to your new employer, you could be paying emergency tax rates of up to 48% on your entire income.
For 2025, the standard rate of income tax in Ireland is 20% up to €42,000 (for single individuals), with income above this threshold taxed at 40%. Additionally, you'll pay USC (Universal Social Charge) and PRSI (Pay Related Social Insurance) on your earnings. Without your proper tax credits applied, you could be losing hundreds of euros from every paycheck.
The Emergency Tax Problem
If your tax credits aren't transferred when you start your new job, you'll typically be placed on emergency tax. This means you'll only receive the basic personal tax credit (€1,875 for 2025) on a weekly or monthly basis, rather than your full annual entitlement. For someone entitled to the full single person's tax credit, this could mean overpaying by over €150 per month until the situation is corrected.
How to Transfer Your Tax Credits
The good news is that transferring your tax credits is straightforward, but it requires action. When you leave your old job, your employer will issue you with a P45 form. This document is crucial—it shows your total pay and tax deducted for the year to date. You must provide this P45 to your new employer immediately.
Additionally, you should log into your myAccount on Revenue.ie and request that your tax credits be transferred to your new employer. Revenue will then issue a new Tax Credit Certificate showing your new employer how much of your annual credits and rate band they should apply. However, this process can take several weeks, during which you may be on emergency tax.
What If You Don't Have a P45?
If you can't get your P45 from your previous employer (perhaps they've ceased trading or you've lost contact), don't panic. You should complete a Form 12A available from Revenue, which allows your new employer to calculate your tax liability based on the information you provide. However, professional assistance can help ensure this is done correctly and that you claim back any overpaid tax as quickly as possible.
Tax Implications of Redundancy
If you're changing jobs due to redundancy, the tax implications are quite different. Ireland offers generous tax relief on redundancy payments, with statutory redundancy payments being completely tax-free. For ex-gratia redundancy payments (payments above the statutory minimum), you may be entitled to significant tax relief through the Standard Capital Superannuation Benefit (SCSB).
The SCSB exemption allows up to €200,000 of your redundancy payment to be tax-free, depending on your circumstances and length of service. This is a complex calculation involving factors like your years of service, your average earnings, and any previous redundancy payments you've received. For detailed information on maximizing your redundancy tax relief, see our guide on redundancy tax refunds in Ireland.
Real-World Examples of Job Change Tax Scenarios
Example 1: The Standard Job Change
Sarah's Situation: Sarah earned €45,000 at her old job and started a new position paying €50,000 in March 2025. She provided her P45 but didn't transfer her tax credits through myAccount until May.
Tax Impact: For two months, Sarah was on emergency tax, receiving only the basic monthly credit of approximately €156.25 instead of her full monthly entitlement. She overpaid roughly €312 in tax during this period. Once her credits transferred, this amount appeared as a credit on her payslip, but if she hadn't acted, she would have needed to claim it back at year-end.
Example 2: Multiple Jobs in One Year
James's Situation: James worked for Company A from January to April 2025 (earning €16,000), then moved to Company B for the rest of the year (earning €36,000), giving him total annual earnings of €52,000.
Tax Impact: Without proper credit management, James's first employer used up €14,000 of his standard rate band, leaving only €28,000 at the 20% rate for his second employer. This meant he paid 40% tax on €8,000 that should have been taxed at 20%, overpaying €1,600. Professional tax assistance helped James reclaim this overpayment through year-end reconciliation.
Example 3: Job Change with Redundancy
Michael's Situation: Michael was made redundant in July 2025 after 15 years of service, receiving a €75,000 redundancy package (€30,000 statutory, €45,000 ex-gratia). He started a new job in September earning €55,000 annually.
Tax Impact: The statutory €30,000 was tax-free automatically. Of the €45,000 ex-gratia payment, Michael was entitled to significant SCSB relief based on his 15 years of service. The calculation (€10,160 + €765 per year of service + €10,000 basic exemption) meant approximately €41,635 of the ex-gratia amount was also tax-free. Without professional guidance, Michael could have paid thousands in unnecessary tax on his severance package.
Career Breaks and Unemployment
If you're taking a career break or experiencing unemployment between jobs, you still need to manage your tax affairs carefully. When you're not working, you're not using your tax credits, but you want to ensure they're available when you return to employment. It's important to inform Revenue of your change in circumstances.
For those claiming Jobseeker's Benefit or other social welfare payments, these are taxable income, though tax is rarely deducted at source. This can create an unexpected tax bill at year-end if you return to work later in the same year. Professional tax advice can help you plan for this and avoid unwelcome surprises.
Moving Abroad: Leaving Irish Employment
If your job change involves relocating abroad, your Irish tax obligations become more complex. You may be entitled to split-year treatment, where you're only taxed as an Irish resident for the part of the year you lived here. However, you'll need to demonstrate that you've truly left Ireland and established tax residency elsewhere.
Many people moving abroad for work are entitled to significant tax refunds from their Irish employment income, as their tax credits and rate bands may not have been fully utilized during their partial year of Irish residence. This requires careful calculation and documentation of your departure date and circumstances.
The Importance of Year-End Tax Returns
Even if you've managed your tax credits properly throughout the year, changing jobs often creates discrepancies that only become apparent at year-end. You might have overpaid tax during transition periods, or your tax credits might not have been optimally distributed across multiple employers. Filing a year-end tax return allows you to claim back any overpaid tax and ensure your affairs are in order.
Many people are also unaware that when you're married or in a civil partnership, you can optimize how your tax credits are allocated between partners. Our guide on married tax credits explains how couples can maximize their tax position, which is particularly important if one partner changes jobs or has varying income throughout the year.
Common Pitfalls to Avoid
When changing jobs, watch out for these common mistakes:
- Delaying P45 submission: Give your P45 to your new employer on day one to minimize emergency tax periods
- Forgetting about USC and PRSI: These are calculated separately from income tax and can add significantly to your burden
- Not claiming work-related expenses: If your new job involves expenses like travel or professional subscriptions, you may be entitled to tax relief
- Ignoring pension contributions: Job changes often mean switching pension schemes, which has tax implications
- Missing Revenue correspondence: Keep your contact details updated with Revenue to receive important notices
Frequently Asked Questions
How long does it take for tax credits to transfer to a new employer?
Once you request a transfer through Revenue's myAccount, it typically takes 3-5 working days for Revenue to issue a new Tax Credit Certificate to your employer. However, your payroll department may need additional time to implement the changes, meaning it could take 2-3 weeks total. During this period, you may be on emergency tax, but any overpayment will be refunded once your credits are properly allocated.
Can I claim back tax if I was on emergency tax for several months?
Absolutely. If you've been on emergency tax, you're entitled to claim back any overpaid tax. In many cases, this happens automatically once your tax credits transfer and will appear as a credit on a future payslip. However, if you've left that employment or the refund doesn't come through automatically, you'll need to file a claim with Revenue, which is where professional assistance ensures you receive everything you're owed.
What happens if I change jobs multiple times in one year?
Each time you change jobs, you need to provide your P45 to your new employer and ensure your tax credits transfer. The challenge with multiple job changes is that your standard rate band gets allocated across different employers, and you may end up paying higher rate tax when you shouldn't. A year-end review is essential in these situations to identify and reclaim any overpaid tax, which can amount to thousands of euros.
Do I need to do anything if I'm going from employment to self-employment?
Yes, this is a significant change in your tax affairs. You'll need to register for income tax as a self-employed person and will be responsible for paying preliminary tax for the following year. Your tax obligations change substantially, and you'll need to file annual tax returns. This transition requires professional guidance to ensure you meet all your obligations and don't face penalties or interest charges.
Should I wait until year-end to claim back overpaid tax from a job change?
While you can wait until year-end, it's not advisable if you've been overpaying tax for months. You're entitled to your money sooner, and proper management of your tax credits means you get your correct net pay from each paycheck rather than providing Revenue with an interest-free loan. That said, a year-end review is still recommended to catch any issues that slipped through during the year.
Get Your Maximum Tax Refund with Professional Help
Changing jobs creates numerous opportunities for tax refunds, from emergency tax overpayments to incorrectly allocated credits and unused allowances. The Irish tax system is complex, and even small mistakes can cost you hundreds or thousands of euros. Many people don't realize they're entitled to refunds from previous years as well—you can claim back up to four years of overpaid tax.
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