Ireland’s Budget 2027, presented on 6 October 2026, leaves the rates of income tax and the Universal Social Charge alone but moves three thresholds that decide how much of your pay is taxed at each rate. The changes apply from 1 January 2027. Below we run the figures through the same engine as our take-home pay calculator to show what they mean for a single employee, and why the gain is smaller than the headline tax cut once PRSI is counted.
What changes on 1 January 2027
- Standard rate band: the amount a single person can earn at 20% before the 40% rate starts rises from €44,000 to €46,500. Married couples and lone parents get proportionate increases.
- Tax credits: the personal credit, the employee (PAYE) credit and the earned income credit each rise from €2,000 to €2,125.
- USC: the top of the 2% band rises from €28,700 to €30,300, so €1,600 more of your income is charged at 2% instead of 3%. The 0.5% band and the exemption for incomes of €13,000 or less stay as they are.
- Minimum wage: the national minimum wage rises to €14.94 an hour. A full-time 39-hour week comes to about €30,298 a year, which is why the USC 2% ceiling was set where it is.
Not changed by this Budget, but worth knowing: employee PRSI went from 4.2% to 4.35% on 1 October 2026 and steps up again to 4.5% on 1 October 2027. Those increases were set out before Budget 2027 and take back part of the gain.
Who is affected
Almost every employee who pays income tax gains something. If you earn more than €46,500, you get the full value of the wider band: €2,500 moves from 40% to 20%, worth €500 a year. Add €250 from the two higher credits and €16 from the USC change, and the most a single PAYE employee can save on income tax and USC is €766, reached at €46,500. Between €44,000 and €46,500 you get part of the band gain; below €44,000 you already pay no 40% tax, so you gain from the credits and USC only. If your credits already cover all your income tax, only the USC change helps. Self-employed people get the earned income credit increase instead of the employee credit.
Worked example: €50,000 a year
Take a single employee on €50,000 with no other income, reliefs or pension contributions. In 2026 our calculator gives income tax of €7,200, USC of €1,033 and PRSI of €2,119, leaving €39,648. With the 2027 band and credits, income tax falls to €6,450 and USC to €1,017. PRSI rises to €2,194, because the full year is charged at 4.35% for nine months and 4.5% for three. Take-home pay comes to €40,339, which is €691 more a year, or about €58 a month.
The Department of Finance quotes a saving of over €700 in income tax and USC at this salary; our figure of €766 agrees. The difference from the take-home gain is PRSI.
Before and after at four salaries
The salary links open the calculator for that amount. It still shows 2026 figures and will switch to 2027 rules from 1 January.
| Gross salary | Take-home 2026 | Take-home 2027 | Change | Income tax | USC | PRSI |
|---|---|---|---|---|---|---|
| €30,000 | €26,296 | €26,514 | +€218 | +€250 | +€13 | −€45 |
| €40,000 | €33,572 | €33,778 | +€206 | +€250 | +€16 | −€60 |
| €50,000 | €39,648 | €40,339 | +€691 | +€750 | +€16 | −€75 |
| €65,000 | €47,563 | €48,231 | +€669 | +€750 | +€16 | −€98 |
At €30,000, most of the gain comes from the higher credits and almost none from the band. At €65,000, the full band and credit gains apply, and the PRSI step costs more because it is charged on every euro. Above about €70,000 the 8% USC rate starts; our examples stay below it, so they do not depend on where that limit lands in 2027.
What to do now
- You don’t need to apply for the new credits and band: Revenue sends your employer an updated payroll notification for 2027, and you get a new tax credit certificate. Check your first payslip of 2027 against the table above.
- If you share credits or a band with a spouse or civil partner, review the split in Revenue’s myAccount once the new certificate appears.
- If you are negotiating a pay rise for 2027, compare offers on take-home pay rather than gross, with our pay raise calculator.
- Remember that the Budget measures still need to pass in the Finance Bill. We will update the calculator on 1 January 2027 and this post if anything changes on the way.
How we calculated this
The 2026 figures are the calculator’s own Ireland rules: a 20% band of €44,000, personal and employee credits of €2,000 each (shown as a 0% band on the first €20,000), USC at 0.5%, 2%, 3% and 8% with the 8% rate from €70,044, and PRSI at a blended 4.2375% for the year. For 2027 we change only the announced figures – the band, the credits (a 0% band of €21,250), the USC 2% ceiling, and PRSI blended to 4.3875%. The model ignores the PRSI weekly exemption, USC exemption below €13,000, pension relief and other credits. Sources: Minister for Finance’s Budget 2027 statement, Department of Finance – Budget 2027 Tax Policy Changes and Citizens Information – Budget 2027.
General information, not tax advice. Your own tax depends on your credits, reliefs and circumstances; check your tax credit certificate with Revenue.