Budget 2027 Tax Changes in Ireland

Budget 2027, delivered on 6 October 2026, raises the standard rate cut-off by €2,500, lifts the personal, employee and earned income credits by €125 each and widens the 2% USC band by €1,600. For a single PAYE employee earning €50,000 or more, that is worth about €766 a year in extra take-home pay from 2027. Income tax rates stay at 20% and 40%, and the PRSI increase already in law goes ahead on 1 October 2027.

These are announced measures. Revenue states that the Oireachtas must amend legislation, and a Finance Bill will be introduced and debated, so the figures below take legal effect only once it is enacted. Nothing changes for the 2026 tax year, and the calculator on this site still uses 2026 rates.

2026 and 2027 figures side by side

For two-income couples, the increase to the combined band is capped at the lower of €37,500 (up from €35,000) or the lower earner's income. The USC exemption for income of €13,000 or less is unchanged, as are the 0.5%, 3% and 8% rates. The Minister for Finance put the personal income tax package at €1.3 billion.

What it is worth to you

The gain has two parts. The higher cut-off moves €2,500 of income from the 40% rate to the 20% rate, saving €500 for anyone earning above it. The credit increases add €250 for an employee, from €125 each on the personal and employee credits. The USC change moves up to €1,600 of income from 3% to 2%, saving up to €16.

The €50,000 example works as follows. On 2026 rates, income tax is €8,800 plus €2,400 (€6,000 at 40%), less €4,000 of credits: €7,200. On 2027 rates it is €9,300 on the first €46,500 plus €1,400 (€3,500 at 40%), less €4,250 of credits: €6,450. The difference is €750. USC falls from €1,032.82 to €1,016.82. The Minister described the effect on a €50,000 earner as over €700 less in income tax and USC, and a two-income couple on €100,000 combined as €1,500 better off.

These workings assume a single PAYE employee with only the standard credits and ignore pension contributions. Married households, people with other credits and the self-employed will see different amounts.

Marginal rates shift slightly as a result. A single employee between €44,000 and €46,500 now keeps 72.65 cent of each extra euro instead of 52.65 cent, because that slice is taxed at 20%, not 40%. The 40% rate starting point for 2027 is therefore €46,500, and total deductions on the next euro above it are still 47.35% (40% income tax, 3% USC and 4.35% PRSI) before the October 2027 PRSI step.

PRSI and employer measures

Budget 2027 did not announce a new PRSI rate. The 0.15 percentage point rise in employee and employer rates already legislated for 1 October 2027 remains scheduled; that follows the rise to 4.35% on 1 October 2026. For a €50,000 salary, a 0.15 point rise costs €75 a year, which partly offsets the €766 gain.

The weekly earnings threshold below which employers pay the lower PRSI rate rises from €552 to €600 for 2027. That is an employer cost, not a deduction from your pay. Separately, the minimum wage is reported to rise by 79 cent to €14.94 an hour from 1 January 2027. Our PRSI explainer lists current rates.

Other personal tax measures

• Help to Buy: the maximum relief rises by €5,000 to €35,000.
• Rent-a-room relief: the tax-free income threshold rises from €14,000 to €16,000.
• Childcare services relief: the exemption rises from €15,000 to €20,000.
• Mortgage interest relief: no extension was announced, and it is set to expire at the end of 2026 according to KPMG.

People aged 70 or over and full medical card holders should watch for Finance Bill details on the reduced USC rates, because KPMG reports no extension of the medical card concession was announced. The current rules are in USC explained.