Understanding where every penny goes in your business is fundamental. I really mean every penny.
If you can’t track your cost you can’t track your profit.
Here’s an example of how an entire Country percieves their costs versus the reality of thier costs.
Most countres are like this and most businesses are like this.
The Tax you pay in Ireland is double what you think it is.
The lower rate of income tax in Ireland is 20%.
That’s a pretty reasonable service charge for the lovely ocean-view rock you get to live on!
But the truth is that the contribution you make is nearer to €40 per €100 than the headline figure of twenty percent.
As a prudent household budgeter, it’s good to have a rough idea of how much of your earned money you actually get to spend on yourself and how much will be divided amongst everyone else.
If you were earning €10 and you were expending to pay me €2 for my services, then it might be prudent of you to discover that I was actually charging you €4. You can decide that for yourself. Maybe you wouldn’t mind at all, either way, as a budgeter it’s good to know where your money goes.
For this demonstration, there are plenty of assumptions, and it’s a complete estimation, but ± a few percent, it applies to you.
In the conceptual ‘Tax Stack’ below, you will get an idea of all the droplets of bleed that together add up to an additional 20% tax that isn’t obviously written on your paycheck. The ‘other’ 20% is still taken from the money you earn it’s just not as obvious.
Persona: An average Irish person in 2025, earning €49,000 gross annually, spending €30,000 post-tax, owning a mid-range car (120 g/km CO?), using 11,000 kWh natural gas and 1,000 liters petrol, with one credit card, private health insurance, and owning a €300,000 home.
Tax stack
The tax stack show the percentage of you wages on average you contribute annually.
Gross Income: €49,000 (100%)
Income Taxes (Inc. USC + PRSI): €14,081.42 (28.74%)
VAT: €3,812.43 (7.78%)
Carbon Tax: €312.67 (0.64%)
Motor Tax: €200 (0.41%)
Local Property Tax (LPT): €315 (0.64%)
TV Licence: €160 (0.33%)
Credit Card Stamp Duty: €30 (0.06%)
Debit/ATM Stamp Duty: €5 (0.01%)
Excise Duties (Fuel + Alcohol): €571 (1.17%)
Insurance Premium Tax: €26 (0.05%)
Deposit Interest Retention Tax (DIRT): €6.60 (0.01%)
Plastic Bag Levy: €11 (0.02%)
Health Insurance Levy: €450 (0.92%)
Total Tax Paid: €19,981.12 (40.78%)
Remainder (Net Income Remaining): €49,000 – €19,981.12 = €29,018.88 (59.22%)
There’s more!
Occasional taxes like stamp duty, VRT on your car and capital gains tax (and a few more) were not included.