The main question for employees is simple: will Budget 2027 put more take-home pay in your pocket?
For many employees, the answer is yes, although the exact benefit will depend on your income and personal tax circumstances.
Payroll tax changes
The announced income tax changes could reduce the amount of tax deducted from your pay, increasing your take-home pay.
The standard rate cut off point will increase to €46,500 & tax credits to €4,250
The 3% USC band increases to €30,300 from €28,700
National minimum wage increase
From 1 January 2027, the national minimum wage will increase to €14.94 per hour, an increase of 79 cent per hour.
For an employee working 39 hours per week, this represents a gross annual increase of approximately €1,600, before tax and other deductions.
Company cars
No further company car measures were announced. Based on the existing rules, the original market value used in the benefit-in-kind calculation will be reduced by €5,000 in 2027 for vehicles in CO₂ categories A to D.
What happens next?
While the key measures have now been announced, further detail will follow through the Finance Bill and Revenue guidance in the coming months.
What you can do now
Employees should check that they are claiming all available tax reliefs and credits. Depending on your circumstances, this may include flat-rate expenses, the Rent Tax Credit and relief for qualifying medical expenses, which can be claimed through Revenue’s MyAccount. If you drive a company car, it is also worth understanding how the vehicle’s emissions category and notional value affect the benefit-in-kind charged through payroll. An electric vehicle may result in a different taxable benefit from a higher-emission diesel vehicle, even where your employer pays for fuel.
How Malone & Co. can help
Our Payroll Team is reviewing the Budget 2027 measures and will continue to monitor the Finance Bill and Revenue guidance. We will provide further updates where confirmed changes affect employees’ payslips.
