What changed in Budget 2026

The 20% tax band was widened from €42,000 to €44,000. Everything above this is taxed at 40%.

💡 Earners above €42k save up to €400/year. The band also increases for married couples to €53,000.

Both the Personal Tax Credit and the Employee (PAYE) Tax Credit were raised from €1,875 to €2,000 each. These reduce your tax bill directly — not just your taxable income.

💡 Every PAYE worker saves €250/year from the credit increase alone.

The 2% USC band ceiling was raised from €25,760 to €28,700, meaning more income is taxed at 2% instead of 3%.

💡 Medical card holders and those aged 70+ earning ≤ €60k pay a maximum USC rate of 2%.

PRSI was increased from 4.1% to 4.35% for Class A employees, effective October 2026. This is part of a multi-year plan to fund the National Pension Reserve.

💡 On a €60,000 salary this costs about €150/year more. PRSI rate will continue rising by 0.1% per year to 2030.

Renters can claim a €1,000 tax credit per year (€2,000 for couples). This reduces your actual tax bill — not just taxable income. Claim via myRevenue.

💡 You can claim for previous years (2022 onwards) retrospectively if you haven't already.

Capital Acquisitions Tax (CAT) thresholds — the amount you can inherit tax-free — were increased.

Increased from €1,800 to €1,950. Applies to married couples where one spouse stays home to care for children or dependants.