Mr McCreevy's hurried introduction of a £3,000 (€3,809) tax allowance for single-income families with a spouse working at home to care for children or dependants complicates the calculation of tax. As discussed last week, tax is calculated by first placing the person's annual income into the relevant tax bands. A single person is taxed at the standard rate of 22 per cent on income up to £17,000 and at the higher rate of 44 per cent for any income over that amount.

Married couples with one income are taxed at 22 per cent up to £28,000 and 44 per cent for additional income. Married couples with two incomes are taxed at the standard rate up to £34,000 and at 44 per cent for more income.

Mr McCreevy's recent change only affects single-income married couples with children. For example, a man making £30,000 with a wife at home caring for their children or an elderly or handicapped relative may calculate tax in the following manner. The family will pay £28,000 at 22 per cent (£6,160) and £2,000 at 44 per cent (£880). This totals £7,040 tax payable.

Personal allowances for married couples are £9,400 at the standard rate of 22 per cent (£2,068) and PAYE allowance is £1,000 for the husband only (£220), as this allowance is only provided to PAYE workers. Since the couple have children they are now granted an additional £3,000 allowance at the standard rate (£660) for a total tax payable of £4,092. This does not take account of PRSI or the 2 per cent health levy.

The Finance Bill, to be published in the new year, will clarify the way this tax is calculated.

Interestingly, £30,000 is a breakpoint salary for married couples, says Pricewaterhouse Cooper's Ms Anne Bolster.

If the couple's income is lower than £30,000, less tax is paid if one person stays at home to care for dependants. For example, a single income couple earning £29,500 where a spouse stays at home has a tax bill of £3,872, not including PRSI or health levy. If both are working, with each earning more than £6,000, the tax bill is £3,982.

Once the income is more than £30,000 less tax is paid if both people are out working. For example, on an income of £31,500 where one is working and the other cares for dependants in the home the tax is £4,752, but if both are working it is £4,422. At £40,000 a single-income couple with a parent at home pay tax of £8,492, while two people out working pay tax of £7,612.