7th October 2026
Budget 2027 – Key Highlights for Businesses and Individuals
(Delivered by the Minister for Finance and the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation)
📋 Overview
Could you keep more of your earnings next year—and will your business face higher employment costs?
Budget 2027 introduces several changes affecting individuals, employees and businesses across Ireland. The key measures include changes to income tax, USC, Capital Gains Tax, employer PRSI and R&D incentives. Understanding the details now can help you prepare your finances and identify opportunities relevant to you.
Measure | What does it mean? | Effective date | ||
Income Tax Band | More income can be taxed at the 20% rate | 1 Jan 2027 | ||
Tax Credits | Reduces the tax liability for eligible taxpayers | 1 Jan 2027 | ||
USC 2% Band | More income remains within the lower USC band | 1 Jan 2027 | ||
Employer PRSI Threshold | More employees remain within the lower PRSI rate | 1 Jan 2027 | ||
Minimum Wage increase | An obligation for all employers – a new minimum wage is €14,94 p/h | 1 Jan 2027 | ||
Capital Acquisition Tax | Increasing all three Group Thresholds – allowing to save more on gifts & inheritance tax | 1 Jan 2027 | ||
Capital Gains Tax | Lower tax on qualifying capital gains | 7 Oct 2026 | ||
Personal Investment Account (PIA) | Keeping certain amount of funds on a saving account tax-free (subject to T&Cs) | 1 July 2027 |
💶 What does this mean for taxpayers?
- Income Tax Band: The standard rate band increases to €46,500 for a single taxpayer; to €50,500 for a Single Parent; to €55,500 for married couple with 1 income and €93,000 for married couple with 2 incomes (the threshold is spitted between spouses as €55,500 for higher-income earner and €37,500 for lower-income earner). Everything above these thresholds will be subject to 40% tax.
- Tax Credits: Main tax credits (Personal, Employee & Earned) increase from €2,000 to €2,125.
- The rent tax credit rises by €150 to €1,150 for a single person, and to €2,300 for a jointly assessed couple.
- USC: The 2% USC band increases to €30,300.
- Rent-A-Room relief – The annual tax-free limit rises from €14,000 to €16,000. The relief is extended to detached auxiliary homes of 32–45 m² built from 27 July 2026.
- The tax-free limit for childminders rises from €15,000 to €20,000, and the limit of three minded children is removed.
- The student contribution is permanently reduced by €150 to €2,350, and SUSI maintenance grants increase by 4.5% from January 2027. From September 2027, maximum childcare fees for children up to senior infants fall from €735 to €550 a month.
- Capital Acquisitions Tax – the CAT rate is unchanged at 33%, but all three group thresholds increase:
- A – child from parent from €400,000 to €420,000
- B– sibling, niece, nephew, grandchild from €40,000 to €44,000
- C – all others from €20,000 to €22,000
👷 What does this mean for employers?
- Minimum Wage: Increases to €14.94 per hour from 1 January 2027.
- Employer PRSI: The lower-rate threshold (currently 9.15%; from 1october 2027 – 9.30%) increases from €552 to €600 per week.
- Employers should factor these changes into their 2027 payroll and cash-flow planning.
📈 What does this mean for investors and business owners?
- CGT: The standard Capital Gains Tax rate falls from 33% to 31% for qualifying gains.
- The new rate applies to disposals made from 7 October 2026.
- Certain gains, including development land, remain subject to 33% CGT.
- R&D Tax Credit: The credit remains at 35%. The first-year R&D payment limit increases from €87,500 to €105,000 rises by 20%, from €87,500 to €105,000. This improves cash flow because more of the credit is paid out in the first year.
- Investment and Start-up Reliefs – the following reliefs are extended. Details of any changes to their conditions are expected in the Finance Bill:
- Employment Investment Incentive (EII)
- Start-up Capital Incentive (SCI)
- Start-up Relief for Entrepreneurs (SURE)
- Relief for Investment in Innovative Enterprises (angel investor CGT relief)
- Corporation tax relief for start-up companies
- The definition of a small company for tax purposes is also to be increased, which should bring more companies within the scope of the SME reliefs
- A new Personal Investment Account (PIA) will be available from 1 July 2027: open to Irish residents aged 18 or over with a PPS number, with one account each; contributions of up to €12,000 a year; tax-free while the account value is up to €50,000, with a flat 1% annual charge on the value above €50,000, deducted by the provider so the investor has no tax return to file; can hold listed shares and bonds and retail funds, including ETFs, but not derivatives or crypto-assets; no minimum holding period. The 1% charge applies even in a year when the investments fall in value.
📅 What should businesses and taxpayers do now?
- Review your 2027 tax position.
- Update payroll and cash-flow forecasts.
- Consider the impact of the new CGT rate.
- Review eligibility for R&D Tax Credit relief.
- Seek professional advice where the changes could have a significant impact.
🔎 Key dates
- 7 October 2026: 31% CGT rate takes effect.
- 1 January 2027: Most income tax, USC and employment measures take effect.
- 2027: Updated R&D Tax Credit measures apply.
📌 Outlook
Budget 2027 provides a combination of tax relief and business incentives, while also introducing additional employment costs. Individuals and businesses should factor the changes into their 2027 tax, payroll and financial planning.
Contact our team today to understand how these changes affect you and your business and prepare a practical tax plan for the year ahead.