Every October, the big question after the Budget is simple: am I better or worse off? For Budget 2026, the honest answer for most PAYE workers is "slightly worse" — and this guide shows exactly why, with the euro figures.
Budget 2026 was a standstill budget for income tax. The rates, the standard rate bands and the main tax credits were all frozen at 2025 levels. Meanwhile employee PRSI rose. The result: on the same salary, you take home a little less in 2026 than in 2025.
What actually changed for 2026
- Income tax — no change. Standard rate cut-off stays €44,000 (single); Personal and Employee credits stay €2,000 each.
- PRSI — up. The employee rate rose from a 4.125% blended average in 2025 to about 4.24% in 2026 (4.2% to September, 4.35% from October).
- USC — a small cut. The 2% band ceiling rose from €27,382 to €28,700, worth about €13 a year to anyone earning above the threshold.
Your take-home pay: 2025 vs 2026
Here's the year-on-year change for a single worker on the same gross salary — 2025 versus 2026:
| Salary | Take-home 2025 | Take-home 2026 | Change / year | Change / month |
|---|---|---|---|---|
| €25,000 | €22,649 | €22,621 | €-28 | €-2.34 |
| €30,000 | €26,317 | €26,296 | €-21 | €-1.71 |
| €40,000 | €33,604 | €33,572 | €-32 | €-2.65 |
| €50,000 | €39,692 | €39,648 | €-43 | €-3.59 |
| €70,000 | €50,267 | €50,201 | €-66 | €-5.46 |
| €100,000 | €64,631 | €64,532 | €-99 | €-8.28 |
The bigger story: fiscal drag
The real cost of a standstill budget isn't the small PRSI increase — it's fiscal drag. When bands and credits don't rise with inflation, any pay rise pushes more of your income into the 40% band and lifts your average tax rate over time. A 3% pay rise that just keeps pace with inflation leaves you worse off in real terms, because a bigger slice is now taxed at the higher rate. Freezing the €44,000 cut-off is, in effect, a quiet tax increase.
What you can do about it
- Claim every credit. Rent, medical insurance, remote-working and other reliefs directly cut your bill — see the tax credits guide.
- Use pension relief. Contributions get income tax relief at your marginal rate, the most effective way to blunt fiscal drag on a pay rise.
- Check a raise's real value. Because bands are frozen, more of any increase is taxed at 40% — see how much of a raise you keep with the pay rise calculator.
See your own numbers
Run your exact salary through the take-home pay calculator, or read how much tax you pay at every salary in 2026 for the full breakdown of PAYE, USC and PRSI.
Frequently asked questions
Did tax credits increase in Budget 2026?
No. The Personal Credit (€2,000) and Employee Credit (€2,000) were held at their 2025 levels, as were the other main credits.
Why is my take-home pay lower in 2026?
Because income tax was frozen while employee PRSI rose. On the same salary, the higher PRSI slightly outweighs the small USC band change, so net pay dips by roughly €20–€100 a year depending on income.