Budget 2027 payroll summary

Standard rate tax bands

Increase of €2,500 in the standard rate bands in 2026.

Tax Credits

€125 increase across the personal, employee and earned income tax credits in 2026.

Rent tax credit

Increase of €150 to €1,150 for single claimant, with increase of €300 to €2,300 for jointly assessed taxpayers.

Home carer credit

Increase of €100 in the Home Carer Credit to €2,050.

Universal Social Charge (USC)

The 2% USC band will increase by €1,600 to €30,300.

Minimum wage

Minimum wage to increase by 79c to €14.94 per hour with effect from 1 January 2027.

PRSI rates

A further increase in PRSI contribution rates of 0.15% for both employers and employees from 1 October 2027, as previously announced and provided under the Social Welfare (Miscellaneous Provisions) Act 2024.

The employer PRSI threshold increased from €552 to €600 per week i.e. employees earning up €600 per week will attract a lower employer PRSI rate. 

Further updates

Enhanced Reporting Requirements (ERR)

The time period for returning information under ERR is being amended to provide an option whereby taxpayers can choose to continue to report ‘on or before’ certain tax-free payments are made, or alternatively they may report the information by the 14th of the month following the income tax month in which the reportable benefit is provided to the employee.  The changes will apply from 2027.

Cycle to work scheme & TaxSaver Scheme

The Minister announced reviews of both the Cycle to Work and TaxSaver schemes. The Cycle to Work scheme will be reviewed in 2027 to identify measures that could increase participation, while the TaxSaver scheme will undergo a comprehensive review to ensure it remains aligned with evolving commuter and working patterns.

* The increase in the rate band is capped at the lower of €37,500 or the income of the lower earner.