Budget 2027
Budget 2027 was announced on 6 October 2026 and includes several changes affecting payroll in 2027.
These cover the standard rate cut-off points for income tax, tax credits, the national minimum wage, Universal Social Charge (USC) rate bands, the Pay Related Social Insurance (PRSI) threshold, and Enhanced Reporting Requirements (ERR). We’ve also included a reminder of the next scheduled PRSI rate increase.
As with every tax year, Revenue will automatically update employees’ Revenue Payroll Notifications (RPNs) for 2027. In turn, SimplePay will automatically apply these updates to your payroll, ensuring everything stays accurate and compliant.
Here’s what’s changing in 2027.
PAYE
Income tax rates remain unchanged at 20% and 40%.
Effective 1 January 2027, the standard rate cut-off point for a single person will increase by €2,500 to €46,500. Proportionate increases will also apply to married couples and civil partners.
The tax credits listed below will each increase by €125 to €2,125:
- Personal Tax Credit
- Employee Tax Credit
- Earned Income Tax Credit
Additionally, the Home Carer Tax Credit will increase by €100 to €2,050.
For a single person, the Rent Tax Credit will increase by €150 to €1,150.
USC
On 1 January 2027, the USC exemption threshold will remain unchanged at €13,000, and the 2% USC band will increase by €1,600 to €30,300.
This ensures that employees earning the national minimum wage for up to 39 hours per week will stay below the 3% USC rate band.
National Minimum Wage
On 1 January 2027, the national minimum wage for people aged 20 and over will increase by €0.79, from €14.15 to €14.94 per hour.
PRSI
As set out in the multi-year PRSI roadmap, PRSI contribution rates increased by 0.15% on 1 October 2026.
On 1 January 2027, the threshold for the higher rate of employer PRSI under Class A is set to increase to the amounts listed in the table below.
| Pay Frequency | Old Threshold (2026) | New Threshold (2027) |
|---|---|---|
| Weekly | €552 | €600 |
| Fortnightly | €1,104 | €1,200 |
| Every 4 weeks | €2,208 | €2,400 |
| Monthly | €2,392 | €2,600 |
On 1 October 2027, PRSI rates will increase again. The Class A employee rate will rise to 4.5% and the employer rate to 11.55% (or 9.3% where weekly earnings are €600 or less). SimplePay will automatically apply these changes from the relevant dates. No action is needed on your part.
Enhanced Reporting Requirements (ERR)
From 1 January 2027, subject to the Finance Bill, employers will be able to submit ERR details either in real time or through monthly filings.
Please note that real-time reporting for ERR remains fully valid, and this update simply provides an alternative submission method rather than replacing existing procedures.
SimplePay remains dedicated to guiding you through the complexities of the new tax year while proactively ensuring your continued compliance.
For more information, see our help pages on PAYE, USC, PRSI, and ERR.
If you have any questions about these changes or our services, please contact our friendly Support team at support@simplepay.cloud.
If you aren’t a SimplePay user yet but are interested in simple, efficient payroll software, why not sign up for a free 30-day trial?
Take care,
Team SimplePay