Budget 2027 was announced on Tuesday, 6 October 2026.
In this guide, we break down the key aspects of Budget 2027 in simple terms and explain what they could mean for you, your finances and your business.
Here are the key highlights:
- Minimum Wage: Increases by €0.79 to €14.94 per hour from 1 January 2027.
- Income Tax: Tax rates remain at 20% and 40%, with changes to tax bands and credits. (New threshold for a single person: €46,500)
- USC: The 2% USC band rises by €1,600 to €30,300, keeping full-time minimum-wage workers outside the higher USC rate.
- Employment Schemes: CE, Tús and Rural Social Scheme top-up payments increase by €2.50.
- Wage Subsidy Scheme: Minimum working hours fall from 15 to 8 hours per week from April 2027.
- Tobacco Products: A packet of 20 cigarettes will increase by €1, including VAT, with a proportional increase on other tobacco products.
We’ll look beyond the headlines to highlight practical points individuals and business owners should consider and the steps you may want to take as the new measures take effect.
Income Tax Bands
The standard rate income tax band will increase in 2027, allowing individuals to earn more before moving into the higher 40% income tax rate. The change is designed to adjust the tax bands alongside changes in earnings and the minimum wage.
- Standard rate band increases by €2,500
- New threshold for a single person: €46,500
- Proportionate increases will apply to married couples and civil partners
- Income tax rates remain unchanged at 20% and 40%
Increased Tax Credits
Several important income tax credits will increase in 2027. This means eligible taxpayers will receive a larger reduction in the amount of income tax they ultimately pay.
- Personal Tax Credit increases by €125
- Employee Tax Credit increases by €125
- Earned Income Tax Credit increases by €125
- Each credit will rise to €2,125
Universal Social Charge (USC)
The USC threshold for the 2% rate will increase in 2027. The change is linked to the increase in the national minimum wage and is intended to prevent full-time minimum-wage workers from being pushed into the higher USC rate.
- 2% USC band increases from €28,700 to €30,300
- Increase of €1,600
- Full-time minimum-wage workers will remain outside the higher 3% USC rate
- Change takes account of the national minimum wage increase
Capital Acquisitions Tax (CAT) Thresholds
The tax-free thresholds for gifts and inheritances under Capital Acquisitions Tax will increase in 2027. The amount a person can receive before CAT becomes applicable will therefore be higher, depending on their relationship with the person giving the gift or inheritance.
- Group A: €420,000, up from €400,000
- Group B: €44,000, up from €40,000
- Group C: €22,000, up from €20,000
National Minimum Wage
The national minimum wage will increase from 1 January 2027. The hourly rate will rise by 79 cents, providing a higher minimum level of pay for eligible workers.
- New minimum wage: €14.94 per hour
- Increase of €0.79 per hour
- Effective from 1 January 2027
- The increase is also reflected in the adjustment to the USC threshold
Employment Programme Supports
People participating in certain employment and community programmes will receive an increase in their weekly top-up payment. The change applies to Community Employment, Tús and the Rural Social Scheme.
- Top-up payment increases by €2.50
- Applies to Community Employment (CE)
- Applies to Tús
- Applies to the Rural Social Scheme
Greater Access to Wage Subsidy Support
The eligibility requirements for the Wage Subsidy Scheme for people with disabilities will change in 2027. The minimum number of hours required to qualify will be significantly reduced, potentially allowing more people working reduced hours to access the scheme.
- Minimum working hours reduced from 15 to 8 hours per week
- Change takes effect in April 2027
- Applies to the Wage Subsidy Scheme
- Makes the scheme accessible to eligible employees working fewer hours
Social Welfare & Pension Increases
Most weekly social welfare payments and pensions will increase from January 2027. The changes are intended to provide additional support to people receiving social welfare payments, with proportional increases applying to qualified adults and reduced-rate recipients.
- Most weekly payments and pensions increase by €10
- Proportional increases for qualified adults and reduced-rate recipients
- Changes take effect from January 2027
Increased Child Support Payment
The weekly Child Support Payment will increase for both younger and older children. The increase will provide an additional €6 per week for each eligible child.
- Children under 12: €64 per week, up from €58
- Children aged 12 and over: €84 per week, up from €78
- Increase of €6 per week in both categories
Working Family Payment
The income limits for the Working Family Payment will increase, making the payment accessible to families with slightly higher household earnings.
- Income limits increase by €30 per week
- Increase applies to all family sizes
- Helps working families remain eligible at higher income levels
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