The Minister for Finance, Paschal Donohoe, announced these measures in Budget 2026 on 7 October 2025. For help running your 2025 year end, visit our Payroll year end hub.  NOTE: To view a summary of Budget 2026, go to revenue.ie
Changes from 1 January 2026
Universal Social Charge (USC) The 2% USC rate band increases by €1,318, raising the ceiling from €27,382 to €28,700. This ensures full-time minimum-wage earners remain outside the higher USC rate bands. | 2026 € | Rate | | Income up to 12,012.00 | 0.5% | | Income from 12,012.01 to 28,700.00 | 2% | | Income from 28,700.01 to 70,044.00 | 3% | | Income above 70,044.00 | 8% | Reduced USC rates continue to apply for: - Individuals aged 70+ with income up to €60,000
- Full medical card holders under 70 earning up to €60,000
- These reduced rates remain in place until 31 December 2027
National minimum wage (NMW) The NMW rate increases by €0.65 from €13.50 to €14.15 per hour. This affects PRSI thresholds and the 2% USC band ceiling.
Auto-enrolment retirement savings scheme Auto-enrolment (My Future Fund) begins on 1 January 2026. Employers must automatically enrol eligible employees. NAERSA manages enrolment, contributions, and opt-out requests. To find out more, visit our Auto enrolment hub.
Changes from 1 October 2026
PRSI threshold increase From 1 October 2026, both employer and employee PRSI contribution rates increase by 0.15%. The threshold rises from €527 to €552 per week.
No changes for 2026
Pay as you earn (PAYE) Tax rates remain unchanged for 2026. ▼ Tax rates and tax bands | Personal circumstances | 2026 € | | Single or widowed, or surviving civil partner, without a qualifying child | 44,000 @ 20% Balance @ 40% | | Single or widowed, or surviving civil partner, qualifying for single person child carer credit | 48,000 @ 20% Balance @ 40% | | Married or in a civil partnership, one spouse or civil partner with income | 53,000 @ 20% Balance @ 40% | | Married or in a civil partnership, both spouses or civil partners with income | 53,000 @ 20% with increase of 35,000 max. Balance @ 40% | ▼ Tax credits | Tax credit | 2026 € | | Single person | 2,000 | | Married or in a civil partnership | 4,000 | | Employee Tax Credit | 2,000 | | Earned Income Tax Credit | 2,000 | | Widowed person or surviving civil partner (without qualifying child) | 1,900 | | Incapacitated Child Credit | 3,800 | Blind Tax Credit
Single person
Married or in a civil partnership:
- one spouse or civil partner blind
- both spouses or civil partners blind
| 1,950
1,950
3,900 | | Dependent relative | 305 | | Home carer tax credit | 1,950 |
Statutory Sick Pay - Current status: Employers must give employees five statutory sick days in 2025
- Future plans: The planned increases to seven days in 2025 and 10 days in 2026 have been postponed
- Reason for delay: The government is reviewing the scheme’s impact before confirming the next phase
Small benefit exemption No announced changes for 2026. The 2025 rules remain in place: - Up to €1,500 in non-cash benefits
- Up to five benefits per employee each year
|