A number of payroll and employment-related changes will affect employers in the year ahead. The summary below highlights the key measures, including Budget 2027 announcements and previously legislated changes that are due to take effect.
National minimum wage
The National Minimum Wage is increasing from €14.15 to €14.94 per hour from the 1st of January 2027.
PRSI increase
No new employer PRSI increase was announced in Budget 2027. However, under the existing PRSI Roadmap, employer PRSI rates are scheduled to increase by a further 0.15 percentage points from 1 October 2027.
My Future Fund
No change was announced to the initial My Future Fund contribution rate. Employer and employee contributions remain at 1.5% of gross pay during the first phase of the scheme, subject to the applicable eligibility rules and earnings limit.
BIK on company cars
No new company car BIK measure was announced. Under the existing phased rules, the general reduction in Original Market Value for cars in emissions categories A1 to D is due to decrease from €10,000 in 2026 to €5,000 in 2027 and €2,500 in 2028. Employers should review their fleet and payroll calculations because a lower reduction may increase the taxable BIK value and the related employer PRSI liability. Separate relief also applies to qualifying electric vehicles.
Small benefit exemption
No change was announced to the Small Benefit Exemption. Employers may continue to provide up to five qualifying non-cash benefits per employee each year, with a combined value of no more than €1,500. The benefits must meet the Revenue conditions, and the date and value of each benefit must be reported under Enhanced Reporting Requirements.
Skills and training
A further €150 million is to be made available through the National Training Fund for skills and training initiatives. As the Fund is financed through the employer levy collected with PRSI, employers should review the programmes available and identify relevant upskilling opportunities for their teams.
What should employers do now?
- Review current pay rates and identify employees affected by the new minimum wage.
- Update 2027 payroll budgets for wage, employer PRSI, My Future Fund and BIK costs, taking account of each measure’s effective date.
- Review reward and retention arrangements, including company cars, pension contributions and qualifying small benefits, and confirm that payroll reporting processes are ready for 2027.
How Malone & Co. Can Help
Our Payroll Team is closely monitoring the Budget 2027 measures and will provide further updates as Revenue releases detailed implementation guidance.
If you would like to discuss how these changes may affect your business, please contact our payroll team.
