13.5% or 23%, from what the goods cost you.

What the calculator works out

The calculator takes the work at 13.5% and the goods at 23%. Goods costing up to two thirds of the price leave the whole job at 13.5%. It also shows the goods as a share of the price.

The VAT is the rate on the whole price, rounded half-up to the cent, as the office rounds the VAT on a quote or invoice. At 23%, a price of €1,234.50 carries €283.935 of VAT, which rounds to €283.94.

The rule and where it comes from

The rule is section 41 of the Value-Added Tax Consolidation Act 2010. It covers a service where goods are supplied as part of the work, such as the parts in a repair or the materials in building work.

Revenue weighs the goods at what they cost the business, against the price of the whole job, both before VAT. Where the goods cost more than two thirds, the whole job is taxed at the rate of the goods.

Construction and repair work on a building is at 13.5%. Building materials are at 23%, apart from ready-to-pour concrete and concrete blocks.

A worked example

A job is priced at €4,500 before VAT, so two thirds of the price is €3,000. A €200 difference in what the goods cost moves the VAT by €427.50:

• Goods that cost you €3,100, 68.9% of the price: 23% on the whole job, €1,035.00 of VAT and €5,535.00 in total.
• Goods that cost you €2,900, 64.4% of the price: 13.5%, €607.50 of VAT and €5,107.50 in total.

What the calculator leaves out

The calculator weighs a job at 13.5% or 23% and nothing else. Outside it:

• Fittings, such as curtains, a floating wooden floor or a plumbed-in dishwasher. Supplied, installed or both, they are at 23% whatever the goods cost.
• A heat pump supplied and installed, at 9% since 1 January 2025. The two-thirds rule no longer applies to it.
• Building a qualifying apartment, at 9% from 26 November 2025 to 31 December 2030.
• Solar panels supplied and installed on a private home, at 0% since 1 May 2023.
• Construction work for a principal contractor who accounts for the VAT under the reverse charge, or between two connected parties. Revenue says the rule cannot apply to either.
• Work by a business not registered for VAT. It charges no VAT.

The same rule on your quotes and invoices

On a quote or invoice that charges VAT for work in Ireland, the office weighs the same fraction from the lines. The price is the Part of the supply lines in the total, as charged. The goods are the Materials lines among them, and on a job the Part lines, at what they cost you. A line picked from the price book carries the part’s Cost, ex VAT. A goods line with no cost recorded is weighed at its price.

The fraction is the Goods threshold in Settings under Tax, set to two thirds at signup. When the goods pass it, the quote and the invoice say why, on screen and on the PDF: “Two-thirds rule: the goods cost more than two thirds of the price, so the whole supply is at 23%.” The invoice screen also shows two-thirds rule beside the rate.

A line added on a job keeps its kind, so labour added there is never weighed as goods.

A Supply rate stated on a line, or on the job’s kind of work, decides the rate instead. At 9%, a heat pump’s rate, the rule is not applied. Stated at 13.5%, for goods at 13.5% themselves such as ready-to-pour concrete, the supply stays at 13.5% when the goods pass two thirds.

A registered business’s quote or invoice for work in Ireland to a customer whose type is Principal contractor is reverse charged, and the rule is not applied to it, unless its kind of work has Construction work unticked.