Savings deposit interest increase income tax?

If you have deposit interest income (with DIRT automatically withheld), can this increase the level of tax you would be liable for on your PAYE income??:mad:

Assume married (joint incomes), 2008 20% DIRT tax, €70K household salary.

If no deposit interest, then your marginal tax is still within the 20% bracket.

Now if you're lucky enough to have €20K of deposit interest... that pushes you into the 41% tax bracket... even though you'd have already paid €4K of DIRT.

Is this for real??
If it is, it makes the POST office savings rates much more attractive as you're saving 41% tax.

DIRT paid at the standard rate satisifes the individual's liability to tax. It does not push you into the higher rate as you get a corresponding increase in the standard rate cut off point.

Thanks!
I just played with ROS form11 and you're right.

If you're a PAYE worker and you do a tax return (because you have significant depsitn interest) like the self assessed wont the deposit interest then become subject to prsi & levys?

dockingtrade said:

If you're a PAYE worker and you do a tax return (because you have significant depsitn interest) like the self assessed wont the deposit interest then become subject to prsi & levys?

Click to expand...

Yes. PRSI & Health Contrib. Levy. Income subject to DIRT is not chargeable to Income Levy.