Budget 2027: what changes for workers
Announced on 6 October 2026 and not yet law. What is proposed, and what it would mean.
Status on 3 November 2026: proposals, not law. Budget 2027 was announced on 6 October 2026. The tax changes are in the Finance (No. 2) Bill 2026, published on 19 October 2026, which has to be passed and signed before it applies; the minimum wage and social welfare changes need their own legal instruments. Details can change on the way. Every calculator on this site keeps the 2026 rules, and none of the figures below are used by them.
Income tax
The standard rate cut-off point for a single person would rise by €2,500 to €46,500, with matching increases for married couples and civil partners. The Personal, Employee and Earned Income tax credits would each rise by €125 to €2,125, and the Home Carer credit by €100 to €2,050. The rates stay at 20% and 40%.
USC
The ceiling of the 2% band would rise by €1,600, from €28,700 to €30,300. The Department of Finance links it to the new minimum wage, and the arithmetic bears it out: €14.94 × 39 hours × 52 weeks is €30,298.32, just under the new ceiling, so a full-time worker on the minimum wage would pay no USC at 3%.
Minimum wage
Announced to rise by 79 cent to €14.94 an hour from 1 January 2027 for workers aged 20 and over. Citizens Information notes that the change requires legislation. The rates for younger workers are set as 90%, 80% and 70% of the adult rate.
Rent Tax Credit
For 2027 and 2028 the cap would rise by €150 to €1,150 for a single claimant and by €300 to €2,300 for a jointly assessed couple. Your 2026 claim is unaffected: it stays at €1,000 or €2,000.
Illness Benefit and other weekly payments
Most weekly social welfare payments would rise by €10 from January 2027, with proportional increases for reduced rates. The Department of Social Protection's Budget 2027 tables put the maximum personal rate of Illness Benefit at €264.00 a week, up from €254.00.
PRSI
The PRSI change in the Budget is on the employer side: the weekly threshold for the higher rate of employer PRSI would rise from €552 to €600 in 2027, so that a full-time job on the new minimum wage does not push the employer into the higher rate.
What it would mean, if approved as announced
Worked out from the announced figures for a single person with the standard credits, leaving PRSI aside. On €35,360 a year (€17 an hour, 40 hours), income tax would fall from €3,072.00 to €2,822.00 and USC from €593.62 to €577.62: €266.00 a year less, about €5.12 a week.
On €50,000, income tax would fall from €7,200.00 to €6,450.00 and USC from €1,032.82 to €1,016.82: €766.00 a year less. Most of it comes from the wider band, which this salary uses in full.
What to do now
For most employees, nothing yet. Once the changes are law, the new credits and bands reach your pay through the instructions Revenue sends your employer, so check your first payslip of 2027. Claim the 2026 Rent Tax Credit as usual: the higher amount is for 2027 and 2028.