Budget 2027 Explained: What It Means for Your Pay, Tax and Take-Home Income

Income tax: more of your pay taxed at 20%

The standard rate cut-off point — the amount of income taxed at 20% before the 40% rate kicks in — is going up by €2,500 for everyone:

For two-income couples, the extra amount is capped at whichever is lower: €37,500 or the income of the lower earner.

On top of that, the Personal, Employee and Earned Income tax credits each rise by €125, and the Home Carer Tax Credit rises by €100.

Key point: If you earn above the old cut-off point, you benefit from both the wider band and the bigger credits — which is why gains jump noticeably for single earners from around €45,000 upwards.

USC: the new 2027 rates

The 2% USC band is being widened by €1,600 so that a full-time worker on the new minimum wage stays out of the higher USC rates.

If your total income is under €13,000, you don't pay USC at all.

PRSI: already-agreed increases

Budget 2027 doesn't introduce new PRSI changes, but increases agreed earlier are still happening. The employee rate went from 4.2% to 4.35% on 1 October 2026 and goes to 4.5% on 1 October 2027. This is why the tax savings below are slightly smaller than the tax credit increases alone would suggest — the official figures already net off the higher PRSI.

Minimum wage: €14.94 an hour from January

The National Minimum Wage rises from €14.15 to €14.94 per hour from 1 January 2027. For someone working 39 hours a week, that's roughly €1,600 more in gross pay over the year.

Worked example (Department of Finance): a single factory worker on the minimum wage, 39 hours a week:

How much extra will you take home?

Single person, no children, PAYE employee

These are the Department of Finance's estimates for 2027, including the PRSI increases.

Married couple, one income, two children, PAYE

These figures include Working Family Payment and Child Benefit where relevant.

Public sector examples

The Department of Finance included several examples that will be familiar to public servants. Pension and Additional Superannuation Contributions are already accounted for in these figures.

A teacher, one-income family. Miriam is a teacher who joined the public service in 2010, earning €67,000. Her husband works in the home and they have two children. Annual gain: €913.

A nurse and a Garda. Donal (a nurse earning €58,000) and Linda (a Garda earning €70,000) both joined the public sector in 2005 and have two teenage children. Annual gain: €1,385.

An accounts manager and single parent. Leo earns €70,000 and is the primary carer of his 13-year-old son. Annual gain: €661.

Looking for your own point on the scale? See our HSE pay scales guide.

If you rent

• Rent Tax Credit rises to €1,150 for a single person and €2,300 for a jointly assessed couple, for the 2027 and 2028 tax years.
• Rent a Room relief — the amount you can earn tax-free from renting a room in your home — rises from €14,000 to €16,000 from 1 January 2027. It's also being extended to certain new garden-style "auxiliary dwellings" installed after 27 July 2026.

If you're buying your first home

Help to Buy goes up from €30,000 to a maximum of €35,000, with effect from 7 October 2026. The other rules are unchanged: you still get the lowest of €35,000, 10% of the purchase price of a new home, or the income tax and DIRT you paid over the previous four years.

If you have children or work in childcare

• Childminders: the tax-free income limit under Childcare Services Relief rises from €15,000 to €20,000, and the limit on the number of children you can mind while claiming it is removed (subject to regulations).
• Nurturing Skills Learner Fund: fee rebates paid to childcare workers who stay in the sector after completing a third-level course will be exempt from income tax, USC and PRSI.
• Third-level fees: tax relief on college fees is being aligned with the Student Contribution Fee, making it easier for families with a second or further student to claim 20% relief.

If you're self-employed or contracting

• The Earned Income Tax Credit rises to €2,125, matching the PAYE credit.
• Professional Services Withholding Tax (the flat 20% deducted from fees paid to some contractors, including in health and public bodies) is being modernised with personalised deduction rates, so less may be withheld from you. This needs a Commencement Order before it takes effect.
• The tax relief for new start-up companies (Section 486C) is extended to the end of 2030.

Saving and investing

• A new Investment Account launches on 1 July 2027 for Irish residents aged 18+ with a PPSN. You can pay in up to €12,000 a year, and tax is a flat 1% a year only on the value above €50,000. Your provider handles the tax, and the "deemed disposal" rule won't apply.
• Exit tax on Irish and equivalent EU/OECD funds and life assurance policies falls from 38% to 35%.
• Capital Gains Tax falls from 33% to 31% for disposals from 7 October 2026 (development land stays at 33%).

Gifts and inheritances

From 7 October 2026, the tax-free thresholds for Capital Acquisitions Tax rise to:

• Group A (e.g. child from parent): €420,000
• Group B (e.g. sibling, niece/nephew, grandchild): €44,000
• Group C (everyone else): €22,000

Fuel, cars and cigarettes

• Fuel: the carbon tax increase on petrol and diesel due on 14 October 2026 is deferred to 1 May 2027. The temporary cut in fuel excise is phased back in between 28 February and 30 June 2027 — so expect pump prices to rise in stages during the first half of 2027.
• Home heating: carbon tax on kerosene and natural gas is reduced to €48.50 per tonne of CO2 until 2030.
• Electric vehicles: VRT relief on EVs is extended to the end of 2028. VRT on most petrol and diesel cars rises by 1% from January.
• Solar panels: the tax-free limit on income from selling your own solar power to the grid rises from €400 to €600.
• Tobacco: up €1 on a pack of 20. Vapes: e-liquid tax up 20c per ml from 1 January 2027.

Key dates

What should you do now?

1. Check your payslip in January. Revenue updates your tax credits and rate band automatically, but it's worth confirming your Tax Credit Certificate in myAccount.
2. Claim the Rent Tax Credit if you rent — you can claim it through myAccount for the current and previous years.
3. Factor the changes into job offers. If you're comparing roles, a salary that crosses €46,500 (single) now keeps more of your income in the 20% band.

Browse the latest public sector and HSE jobs on JobVacancies.ie.

Source: Department of Finance, Budget 2027 Tax Policy Changes, laid before the Oireachtas on 6 October 2026. Measures are subject to the Finance (No. 2) Bill 2026 and may change before enactment. This guide is general information and not tax or financial advice — for your personal situation, check with Revenue or a qualified tax adviser.