Tax Non-smoking PAYE workers with children will be the families who benefit most from the Budget. However, many will notice little difference in their take-home pay.

Some families may even be worse off next year as a result of benefit-in-kind tax measures announced in last year's Budget, which come into effect on January 1st.

PAYE workers will benefit from a €240 increase in the employee tax credit, which is to rise from €800 to €1,040 a year from January. This works out as €20 extra a month.

This measure ensures that tax is not payable on 90 per cent of the minimum wage and will remove 39,200 taxpayers from the tax net.

The increases in child benefit mean that parents will receive an additional €6 per child for the first and second child and €8 for third and subsequent children.

However, these increases, which were lower than expected, do not become effective until April 2004. From this month, dual-income married couples with two children who earn a combined income of €30,000-€80,000 under the PAYE system will be €52 better off each month.

Single people earning €20,000-€40,000 will see their net monthly income rise by just €20 in 2004.

The net monthly income of single-income married couples in the tax net will increase by €14-€20 from January, or by €26-€32 from April if they have two children.

Because the personal tax credits for single and married people were not increased, self-employed single people will not gain anything from the Budget measures.

A self-employed person in a single-income family with two children will see the family's net annual income increase by €108 in 2004.

The age exemption limits for income tax rose by €500 for a single person and €1,000 for a married couple, following increases of €2,000/€4,000 last year.

This means a single person aged 65 and over can earn €15,500 and a married couple aged 65 and over can earn €31,000 before they become liable for income tax.

The measure will remove 2,200 taxpayers aged 65 and over from the tax net.

There were no further changes to the ceiling for employee pay-related social insurance (PRSI).

The ceiling on which the 4 per cent rate of PRSI is payable will increase marginally from €40,420 to €42,160, as had been previously signalled in the Budget Estimates.

There were also no changes to the rate bands for the standard or top rate of tax.

These remain at 20 per cent for the first €28,000 of income and 12 per cent on any additional income, subject to personal credits and other reliefs.

The case studies shown opposite, which outline how five hypothetical families and a single person were affected by Budget 2004, were prepared by the HRS Employment Tax Services Group at PricewaterhouseCoopers on behalf of The Irish Times.

Despite the increases in the PAYE tax credits and child benefit announced by the Minister for Finance yesterday, people who receive benefits-in-kind from their employer may actually see their net income fall next year.

From January 1st, PAYE and PRSI will be applied to benefits-in-kind such as company cars, preferential loans and club subscriptions.

For example, single worker Kate's increased PAYE tax credit - worth €20 a month - will be completely wiped out by the new PRSI charge on her company car. She will be €90 a month worse off in 2004.

As a dual-income couple with two children, Brian and Sarah's monthly income should increase by €52 (twice the €20 PAYE credit plus €6 extra child benefit for each of their two children).

However, Brian's additional tax on his benefits-in-kind mean the couple's joint monthly income will rise by just €34.