Savings of 10% with proposed new 30% tax bracket

Those who earn €40,000 a year could be in line to save 10% on their income tax under proposed plans.

Senator Regina Doherty is calling for the government to implement a new tax bracket in next month's budget.

She says it would allow middle income earners retain more of their wages as they tackle the country's high inflation rate.

John Lowe from The Money Doctors explains how it would work.

"People earning €40,000 are definately on 40% tax rate," he added.

"So, if the 30% is introduced it will probably be €50,000 before the 40% tax rate is hit.

"All those people from €36,000 to €50,000 who are on the 40% will come back down to 30% and save 10% of their income."