01/09/2026
Budget 2026/2027 Forecast
Likely Changes for PAYE Taxpayers
Budget 2027 will be announced on 6th October 2026, so nobody yet knows the final figures. However, based on comments from the Minister for Finance, Government messaging, & pre-budget commentary, a personal tax package is widely expected, particularly after criticism that Budget 2026 largely froze income tax bands and credits.
To keep up to date follow our page or join the Facebook Group for PAYE Taxpayers called Payroll Matters in Ireland. New members are always welcome.
Most likely tax measures for Budget 2027
1. Increase in the 20% tax band
This is probably the most likely measure.
Finance Minister Simon Harris has stated that he wants progress on the point at which PAYE workers start paying the 40% rate and that workers should be able to keep more of pay rises and promotions.
Possible outcome:
Single person band rises from €44,000 to around €46,000 to €48,000
Married one-income band rises from €53,000 to around €55,000 to €57,000
Married two-income maximum band rises from €88,000 to around €92,000 to €96,000
These figures are estimates from Payroll Matters in Ireland and Boyle Payroll Project Management - BPPM, not Government proposals.
2. Increase in Personal and PAYE Tax Credits
Many tax commentators expect increases to offset inflation and wage growth.
Possible outcome:
Personal Tax Credit: €2,000 → €2,100 or €2,150
PAYE Credit: €2,000 → €2,100 or €2,150
Earned Income Credit likely to increase by a similar amount.
For a PAYE worker, a €100 increase in both the Personal and PAYE credits would reduce annual income tax by €200.
3. USC Changes
There is speculation that USC could again be adjusted rather than cutting income tax rates.
Most likely options include:
Widening the current 2% USC band.
Raising the point at which the 8% USC rate applies.
A small reduction in one of the USC rates.
The least likely outcome is a major USC overhaul.
4. No change to income tax rates
Most analysts expect:
20% standard rate remains 20%.
40% higher rate remains 40%.
The focus is expected to be on bands and credits rather than changing the rates themselves.
My best estimate
If the Government delivers the "income tax package" it has been signalling, we would expect something close to:
Single 20% band: €44,000 → €47,000
Personal Tax Credit: €2,000 → €2,100
PAYE Credit: €2,000 → €2,100
Earned Income Credit: €2,000 → €2,100
USC 2% band widened by another €1,500 to €3,000
That would be worth roughly:
€250 to €400 per year for many workers on €35,000 to €60,000.
€400 to €700+ per year for higher earners paying the 40% rate.
Those are informed estimates only, but they align closely with the direction of what is being discussed ahead of Budget 2027.
