Money Matters

Budget 2027 Ireland: What the new measures mean for businesses

Budget 2027 Ireland brings changes to payroll, Income Tax, employer PRSI, Capital Gains Tax, energy costs and business incentives. Discover what the new measures mean for your business and the actions to take now.

Published 14 October, 202613 min read Share

Key takeaways

These are the headline changes for Irish employers and business owners.

Check the detailed section for each measure before acting.

• The adult National Minimum Wage is set to rise from €14.15 to €14.94 per hour from 1 January 2027, while the weekly earnings threshold for the higher employer PRSI rate is set to rise from €552 to €600.
• The proposed 2027 Standard Rate Cut-Off Point is €46,500 for a single person without the Single Person Child Carer Credit. Other bands depend on personal circumstances.
• Revenue says the standard Capital Gains Tax rate is 31% for disposals on or after 7 October 2026. Development-land gains remain subject to 33%.
• Budget 2027 proposes changes to the R&D tax credit and several enterprise reliefs, subject to the Finance Bill and final rules.
• Employers must continue the current Enhanced Reporting Requirements process until the commencement date and operating rules for any monthly option are confirmed.

Budget 2027 was announced on 6 October 2026, but the measures do not share one start date.

Some changes took effect on 7 October 2026, some begin later in October, some are proposed for 2027, and others still require legislation, Revenue guidance, European Union approval, or a commencement order.

Revenue says the Government will ask the Oireachtas to amend legislation where necessary to implement the Budget proposals.

Check the confirmed effective date and final conditions before changing your payroll, tax, or reporting processes.

See Revenue’s Budget 2027 information for updates.

This article explains the measures most likely to affect your payroll, business costs, investment plans, and reporting processes, and what your business can do next.

Here’s what we’ll cover:

What are the main Budget 2027 changes for businesses?

Here’s a quick summary of the main measures in this article, including which changes are already in effect and which still need final legislation or guidance.

Payroll and PRSI

What’s changing: The minimum wage is set to rise to €14.94, and the higher employer PRSI threshold is set to rise to €600 a week.

When: Proposed for 1 January 2027.

What to do: Model the combined employment cost and prepare for updated payroll settings.

Income Tax and USC

What’s changing: The Standard Rate Cut-Off Point and main credits are proposed to rise. The 3% USC entry threshold is proposed to rise to €30,300.

When: Proposed for 2027.

What to do: Wait for Revenue payroll guidance, then test the 2027 settings.

Capital Gains Tax

What’s changing: The standard rate is 31%, except for development-land gains.

When: Disposals on or after 7 October 2026.

What to do: Check the asset, transaction date, and available reliefs before acting.

R&D and enterprise reliefs

What’s changing: R&D limits and qualifying-cost rules are proposed to change, and several reliefs are proposed for extension.

When: Subject to the Finance Bill and final rules.

What to do: Check eligibility and strengthen project and cost records.

Employer reporting

What’s changing: An optional monthly return is proposed for specified Enhanced Reporting Requirements items.

When: The start date and operating rules are not yet confirmed.

What to do: Continue the current on-or-before reporting process.

Energy and transport

What’s changing: Carbon tax on kerosene and natural gas reduces, and fuel-excise restoration differs by fuel type.

When: From 14 October 2026, with staged dates in 2027.

What to do: Update forecasts using the correct date for each fuel.

How will payroll and employment costs change in 2027?

The adult National Minimum Wage is set to rise by 79 cents, about 5.6%, from €14.15 to €14.94 per hour from 1 January 2027.

The age-related minimum wage rates for younger workers are set to increase proportionately.

If your business employs people at or close to the minimum wage, update your 2027 employment-cost forecast. Include employer PRSI, pension contributions, overtime, and any adjustments needed to maintain pay differences between roles.

The income threshold at which the 3% Universal Social Charge (USC) rate begins is proposed to rise from €28,700 to €30,300.

This would leave more income within the 2% band and is intended to prevent a full-time adult worker on the new minimum wage from moving into the 3% band.

The higher-rate employer Pay-Related Social Insurance (PRSI) weekly earnings threshold is set to rise from €552 to €600 in 2027.

Employers may pay less PRSI for relevant employees whose weekly pay would otherwise exceed the old threshold but remains within the new one.

The saving is not a fixed amount for every employee.

It depends on weekly earnings, PRSI class, and periods worked. Model the change alongside wage and pension costs.

The business group Ibec welcomed the increased employer PRSI threshold, because it shares part of the cost of the minimum wage increase between employers and the Government.

It wants this approach to guide future increases to the minimum wage.

How will Income Tax and USC change in 2027?

Budget 2027 proposes a €1.3 billion personal tax package covering the Standard Rate Cut-Off Point, the main Income Tax credits, and the income threshold at which the 3% USC rate begins.

The proposed 2027 standard-rate cut-off is €46,500 for a single person without the Single Person Child Carer Credit.

It is €50,500 for a qualifying single person with that credit. Other bands depend on marital and income circumstances.

The proposed Personal, Employee, and Earned Income Tax Credits each rise by €125 to €2,125. Entitlement depends on income type.

Where a person qualifies for both the Employee and Earned Income credits, their combined value cannot exceed the maximum Employee Tax Credit.

A person paying Income Tax at the higher rate could benefit from both the wider standard-rate band and the increased tax credits.

A person who remains within the 20% band would not benefit from the wider band but may still benefit from higher credits and the revised USC threshold.

What energy measures could affect business costs?

Energy measures have different commencement and restoration dates.

Use the date and fuel type that apply to your business rather than applying one rate across the whole year.

The carbon tax on kerosene and natural gas is set to reduce to €48.50 per tonne of carbon dioxide from 14 October 2026.

The Government says it intends to maintain that rate for the life of the current Government.

Temporary non-carbon fuel-excise reductions continue up to 27 February 2027.

The first restoration takes effect on 28 February 2027.

Marked gas oil is fully restored at that stage. Petrol and auto diesel then rise again on 8 April, 1 May, and 30 June 2027.

Vehicle Registration Tax relief for electric vehicles will continue until 31 December 2028.

VRT rates for passenger cars in emissions bands three to 20 will increase by one percentage point.

If fuel, heating, or distribution is a significant cost for your business, update your forecast using the separate carbon-tax and fuel-excise dates.

If you are replacing company vehicles, compare the purchase cost, VRT treatment, running costs, and Benefit-in-Kind position before deciding.

What energy grants are available?

Check the current Sustainable Energy Authority of Ireland (SEAI) scheme for your project before ordering equipment or starting work.

For the non-domestic solar grant, apply and wait for a grant offer before works begin.

Confirm eligible costs, installer requirements, tax clearance, and other scheme conditions.

However, there was disappointment among climate advocacy groups that the SEAI was only allocated a 2% increase in its budget, despite there being a significant surge in demand in the past year.

See the SEAI Non-Domestic Microgen Grant guidance before starting a solar project.

You can also explore other government grants for small businesses in Ireland that may support your energy efficiency projects.

Which Budget 2027 measures support business investment?

Capital Gains Tax

Revenue says the standard Capital Gains Tax (CGT) rate is 31% for disposals on or after 7 October 2026.

The previous 33% standard rate applies to disposals up to 6 October 2026, and development-land gains remain subject to 33%.

Other rates and reliefs may apply. Check the asset, ownership structure, transaction date, and available reliefs with a tax adviser before acting.

Read Revenue eBrief 142/26 on the CGT rate of charge for the official effective-date detail.

Research and development tax credit

Subject to the Finance Bill and final Revenue guidance, Budget 2027 proposes several changes to the research and development (R&D) tax credit:

• The first-year payment threshold is proposed to rise from €87,500 to €105,000. A qualifying company could therefore receive a larger proportion of its credit in the first payment.
• For each eligible subcontracting category, the proposed cap rises to the greater of 20% of qualifying in-house R&D expenditure or €200,000. At least an equivalent amount of qualifying in-house R&D expenditure would still be required.
• The Government proposes to allow qualifying companies to increase their qualifying cost base by 5% of qualifying R&D wage costs, provided they have incurred sufficient expenditure. The Finance Bill will set the final conditions.
• The preliminary Corporation Tax rules are proposed to be simplified where a company offsets an R&D tax credit against its tax liabilities.
• A proposed Finance Bill amendment would allow the regulated status of a clinical trial to be used in satisfying the R&D scientific test. The final wording is still being developed, and all other qualifying conditions would continue to apply.

If you plan to claim the R&D tax credit:

• keep clear records of the project,
• the scientific or technological uncertainty,
• the work carried out,
• the employees and subcontractors involved,
• and how each cost relates to qualifying activity.

Investment and start-up reliefs

Several investment and start-up reliefs due to expire at the end of 2026 are proposed for extension, subject to final legislation and any required European Union State aid approval:

• Employment Investment Incentive: Income Tax relief for individuals who invest in qualifying companies.
• Start-Up Capital Incentive: Relief designed to help qualifying early-stage businesses raise investment from family members.
• Start-Up Relief for Entrepreneurs: A refund of Income Tax previously paid by qualifying individuals who leave employment to start a company.
• Relief for Investment in Innovative Enterprises: A reduced CGT rate for qualifying investments in innovative businesses, commonly known as Angel Investor Relief.

The proposed Knowledge Development Box extension would preserve a reduced effective Corporation Tax rate for companies that meet the regime’s conditions on qualifying assets, qualifying R&D, and eligible profits.

Check the final legislation and Revenue guidance before assuming that particular intellectual-property income qualifies.

See Revenue’s Knowledge Development Box guidance for the current conditions.

How will employer expense reporting change?

Budget 2027 proposes an optional monthly return for specified Enhanced Reporting Requirements items.

These include qualifying travel and subsistence payments, remote-working daily allowances, and small benefits.

Official publications currently conflict on the proposed commencement date.

The Department of Finance publication refers to 1 January 2027, while the National Enterprise Hub refers to January 2028. Revenue has not yet resolved that difference in operational guidance.

Continue the current on-or-before reporting process until the commencement date, deadline, and operating rules are confirmed in legislation and Revenue guidance.

If the monthly option takes effect as described by the Department of Finance, the return would be due by the 14th of the following income-tax month.

Confirm the final scope, deadline, and start date with Revenue before changing your process.

Review the current Revenue Enhanced Reporting Requirements guidance while the new rules are being finalised.

What other business support was announced?

The following programmes may be relevant to particular growth, skills, and infrastructure plans.

They are not automatic sources of funding, so wait for programme-specific eligibility and application details.

The Ireland Strategic Investment Fund, working with Enterprise Ireland, will operate a three-year €1 billion investment programme for Irish businesses seeking to scale up and grow internationally.

The National Training Fund will allocate €150 million over three years to skills development linked to artificial intelligence and wider workplace change.

Budget 2027 also includes capital expenditure for transport, water, housing, and urban infrastructure.

The commercial impact will depend on individual projects, procurement processes, and delivery schedules.

What is the new Irish Investment Account?

Subject to legislation and provider availability, the Irish Investment Account is planned for Irish-resident people aged 18 or over who have a Personal Public Service Number.

One account per person is planned initially, and the account is expected to become available from 1 July 2027.

• The announced annual contribution cap is €12,000.
• A 1% annual tax would apply to the portion of the average daily account value above €50,000.
• The provider would normally calculate the tax and report it to Revenue.
• Investments held within the account are planned to sit outside CGT, Dividend Withholding Tax, Investment Undertaking Tax, and Life Assurance Exit Tax.
• The account is not expected to apply the usual deemed-disposal rules.

The Finance Bill and Revenue guidance will confirm eligible investments, provider requirements, withdrawal treatment, and administration.

The account is a personal investment measure rather than a source of business finance.

See the Revenue Irish Investment Account technical forum notice for current technical information.

Which other Budget measures may affect business owners personally?

These personal tax measures may be relevant to some business owners and employees, but they should be kept separate from company tax and financial planning.

• The Capital Acquisitions Tax group thresholds increased to €420,000, €44,000, and €22,000 for relevant gifts and inheritances taken on or after 7 October 2026. The applicable group and prior benefits affect the calculation.
• The Rent Tax Credit is proposed to rise to €1,150 for a single claimant and €2,300 for a jointly assessed couple.
• The proposed Rent-a-Room Relief income ceiling rises to €16,000 from 1 January 2027, subject to the usual eligibility conditions. If qualifying receipts exceed the applicable ceiling, the full amount is taxable.
• For qualifying contracts signed, or qualifying self-build first mortgage drawdowns made, from 7 October 2026, the Help to Buy maximum rises to €35,000. The actual refund remains limited by property value, Income Tax and Deposit Interest Retention Tax paid, and scheme eligibility.

What should your business do now?

Use these actions to prepare without implementing proposals before their legal and operational details are confirmed.

1. Model your 2027 employment costs

Include the proposed minimum wage, employer PRSI, pension contributions, overtime, and any adjustments required to maintain pay differences between roles.

2. Prepare for payroll updates

Revenue says 2027 Revenue Payroll Notifications are expected in early December 2026 and must be requested for the first 2027 payroll. Do not reuse a 2026 notification.

3. Keep the current expense-reporting process

Continue on-or-before reporting until Revenue confirms the monthly option’s start date, scope, deadline, and operating rules.

4. Review planned investments and disposals

Ask your tax adviser whether the CGT change, proposed R&D rules, or extended enterprise reliefs affect a transaction or project you are planning.

5. Update your energy and transport forecast

Apply the correct carbon-tax and fuel-excise dates for each fuel rather than one assumption across the year.

6. Track legislation and official guidance

Record which announcements are already effective and which still require legislation, a commencement order, or updated Revenue guidance.

Common mistakes to avoid

The main risk is treating a Budget headline as a complete operating rule. Avoid these mistakes when updating your plans.

• Treating every Budget announcement as effective from 1 January 2027.
• Applying the 31% CGT rate to development-land gains or to disposals before 7 October 2026.
• Assuming the higher employer PRSI threshold creates a fixed saving for every employee below €600 a week.
• Using one fuel-excise restoration timetable for marked gas oil, petrol, and auto diesel.
• Changing ERR processes before Revenue resolves the start date and publishes operating guidance.
• Starting grant-funded solar work before receiving the required grant offer.
• Claiming an R&D or investment relief without records that support the qualifying conditions.

Final thoughts

Budget 2027 gives some businesses useful support through lower capital taxes, proposed investment incentives, and potential reporting flexibility.

Employers with lower-paid staff still need to prepare for higher wage costs, while energy-intensive businesses must plan around separate fuel and tax dates.

Separate measures already in effect from proposals awaiting legislation or guidance.

Update your forecasts, prepare your payroll and reporting data, and use the relevant Revenue or Department of Finance source before changing a process.

To manage these changes effectively, consider using a cash flow statement template to track the impact on your finances.

If you’re reviewing your financial setup, ensure you have the right business bank account for your small business.

Frequently asked questions about Budget 2027 for businesses

When was Budget 2027 announced?

Budget 2027 was announced on 6 October 2026.

When did the 31% standard CGT rate begin?

Revenue says the 31% standard rate applies to disposals on or after 7 October 2026. Development-land gains remain subject to 33%.

What will the adult National Minimum Wage be in 2027?

The adult rate is set to rise from €14.15 to €14.94 per hour from 1 January 2027.

What will the employer PRSI threshold be in 2027?

The weekly earnings threshold for the higher employer PRSI rate is set to rise from €552 to €600. The effect depends on pay, PRSI class, and periods worked.

Can employers switch to monthly ERR reporting now?

No.

Continue the current on-or-before reporting process until the commencement date, deadline, and operating rules are confirmed in legislation and Revenue guidance.

Are all Budget 2027 measures final?

No.

Some announcements are already effective, while others require Finance Bill legislation, Revenue guidance, European Union approval, or a commencement order.

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