30th October 2025
🇮🇪 Budget 2026 Ireland – Key Highlights for Businesses and Individuals
(Delivered 7 October 2025 by Ministers Paschal Donohoe & Jack Chambers)
🔹 Overview
The Government announced a €9.4 billion Budget 2026 package, comprising €8.1 billion in additional public expenditure and €1.3 billion in tax and cost-of-living measures.
Key priorities:
- Protecting jobs and competitiveness
- Delivering infrastructure and housing
- Supporting the most vulnerable
A central theme is the move away from broad one-off supports toward more sustainable, targeted measures to balance fiscal discipline with social protection.
💰 Tax and Pay-Related Measures
Measure | Detail | Effective Date |
USC 2% Band | Increased by €1,318 to €28,700 to shield lower-income workers | 1 Jan 2026 |
PRSI Rates (Employee & Employer) | All classes of PRSI increased by 0.1 percent from 1st October 2025 with further increases of 0.15 percent in October 2026 & 2027 and 0.2 percent in October 2028. | – |
Research and Development (R&D) Tax Credit | Rate increased to 35%; first-year threshold raised to €87,500 | 1 Jan 2026 |
Minimum Wage | Increased by €0.65 to €14.15/hour | 1 Jan 2026 |
Auto-Enrolment Pension Scheme | In 2026, employee contribution will be 1.5% of gross salary, employer contribution 1.5% and the State tops it up by 0.5%. | 1 Jan 2026 |
Hospitality VAT | Reduced from 13.5% → 9% (food, catering, hairdressing) | 1 Jul 2026 |
Rent Tax Credit | Extended to end-2028 | – |
Mortgage Interest Relief | Extended for 2 years (tapered) | – |
VAT on new apartments | Reduces from 13.5% → 9% until 31 December 2030 | 8 October 2025 |
Energy VAT Rate | 9% rate for gas & electricity extended to 2030 | – |
🏠 Social Protection & Supports
Area | Change | Notes |
Weekly Social Welfare Rates | +€10 per week | Across core payments |
Working Family Payment income limits | +60 per week | For all family sizes |
Child Support Payment | +€8 (under 12s) / +€16 (12 +) | From Jan 2026 |
Fuel Allowance | +€5 → €38/week | Wider eligibility |
🏗️ Housing & Infrastructure Investment
- €2.9 billion allocated for new social homes and acquisitions.
- €1.2 billion for Help-to-Buy and First Home schemes.
- €140 million for retrofit and energy-efficiency works.
- Overall capital budget rises by €2 billion, bringing total departmental allocation to €116.8 billion for 2026.
- Emphasis on long-term housing supply, green transition, and regional development.
🧾 Enterprise & Business Supports
- Enhanced R&D tax credit to stimulate innovation and attract FDI.
- Digital Games Tax Credit (DGTC) is extended until 31 December 2031.
- SME and digitalisation support through Enterprise Ireland and Local Enterprise Offices strengthened.
- Green transition funding expanded under the Climate Action Fund.
- Job creation projection: +63,500 positions by end-2026; inflation forecast around 2%.
📌 Implications for:
- Employers: Plan for the minimum wage rise and review payroll budgets for 2026.
- Individuals: While income tax rates remain unchanged, higher USC thresholds and continued rent relief offer modest gains.
- Property sector: Extended housing incentives and funding will support continued activity and retrofitting demand.
- Businesses & R&D: The enhanced credit provides a stronger incentive to invest in innovation and sustainability.
Outlook
Budget 2026 underscores a steady, fiscally responsible approach — targeting growth through infrastructure, innovation, and social resilience while managing inflation and maintaining competitiveness.
➡️ For tailored advice on how these changes may impact you or your business, please contact our team for guidance.
