Personal income tax bands and credits
In a significant change from the last four budgets, the Minister has confirmed tax bands will remain unchanged in 2026.
Universal Social Charge (USC)
The 2% USC rate band ceiling will increase from €27,382 to €28,700. The 3% rate of USC remains unchanged, alongside the exemption for income less than €13,000.
This will ensure that a full-time worker on the minimum wage who benefits from the increase in the hourly minimum wage rate from €13.50 to €14.15 will remain outside of the highest rates of USC.
There will also be an extension of the USC concession for medical card holders to 31 December 2027.
| Income | USC |
|---|---|
| From €1 – €12,012 | 0.5% |
| From €12,013 – €28,700 | 2% |
| From €28,701 – €70,044 | 3% |
| Over €70,044 | 8% |
| Personal tax credits and bands | 2026 | 2025 |
|---|---|---|
| Personal tax credits: | ||
| Single | €2,000 | €2,000 |
| Married | €4,000 | €4,000 |
| PAYE | €2,000 | €2,000 |
| Earned income tax credit for self-employed | €2,000 | €2,000 |
| Rent tax credit | €1,000 | €1,000 |
| Home carer tax credit | €1,950 | €1,950 |
| Age exemption limits (aged 65 and over): | ||
| Single | €18,000 | €18,000 |
| Married | €36,000 | €36,000 |
| 20% standard rate bands: | ||
| Single | €44,000 | €44,000 |
| Married one income | €53,000 | €53,000 |
| Married two incomes | €88,000 | €88,000 |
PRSI
Increases to both employer and employee PRSI rates of 0.1% already took effect from 1 October 2025, ahead of Budget 2026. This brought Class A PRSI rates to 4.2% for employees and 11.25% for employers.
Legislation for larger increases are already provided for, with a 0.15% increase from 1 October 2026, another 0.15% on 1 October 2027 and an additional 0.2% on 1 October 2028.
Help to Buy Scheme
The Help to Buy Scheme will remain at the current rates until the end of 2029.
Rent tax credit
The rent tax credit remains unchanged, with an extension provided up to 31 December 2028. This will result in €1,000 per year or €2,000 for jointly assessed.
Automatic Enrolment Retirement Savings Scheme – “My Future Fund”
Under the auto enrolment (AE) scheme, the employee, employer, and the Government will pay into an employee’s pension fund.
From 1 January 2026, employee, employer and Government contributions will be a set rate of 1.5% of gross earnings. This will remain in place for a period of three years with gradual increases over the course of the following six years.
Finance Bill 2025 will provide for additional amendments to the tax treatment for the scheme. These will address the tax treatment of AE retirement savings on the death of the participant. Further amendments are also required to exempt AE provider schemes from investment undertaking tax and to provide an exemption from USC for employer contributions to AE.
Mortgage interest tax relief
The mortgage interest tax relief is to be extended, on a tapered basis, for two years to 31 December 2026. The relief available for 2025 will be maintained at the current level, with the tax credit limited to €1,250 per property. The final year relief limit will be reduced, with the credit limited to €625 per applicable property.
Funds and life assurance products
The tax rate applied to Irish and equivalent offshore funds will be reduced from 41% to 38%. The rate change will also apply to Exchange Traded Funds (ETFs) that are subject to tax under this regime, including Irish domiciled ETFs.
Deduction for retrofitting by landlords
This income tax relief is being extended to 31 December 2028. The relief is being amended by allowing it to be claimed in respect of the year the expenditure is incurred. Additionally, the number of properties for which landlords can claim the relief will increase from two to three.