Irish Budget 2026 at a glance: the key payroll and financial changes you need to know

The 2026 budget is the first under the new Government, and is described as a ‘reasonable’ budget with the aim of ‘protecting jobs and protecting growth’, according to the Government.

This may come as a relief to some, given the uncertain nature of the global economy; however, opposition members branded the Budget as ‘disappointing’, and stated that ordinary people were ‘left in the lurch’.

Whatever your view, one thing is certain: to remain compliant, businesses must adapt to change.

So, to keep you updated, in this blog, we have covered the key aspects of Budget 2026, highlighting the changes and how they will directly impact payroll and finances.

Increase in National Minimum Wage (NMW).

From 1 January 2026, the Minimum Wage will be increased by €0.65 per hour, bringing it to €14.15 per hour.

In connection with this, the Universal Social Charge (USC) rate ceiling of 2% will be increased by €1,318 to €28,700.

Paschal Donohoe, Minister for Finance, said: “This increase will ensure that full-time minimum wage workers will remain outside the USC top rate, while providing modest benefits to all workers whose income is above that amount.”

Rental Tax Credit Extension

The Rental Tax Credit has been extended for three years, until the end of 2028, and Donohoe said that almost 400,000 people would receive the benefit in 2023.

Notes: Mortgage Interest Tax Relief has been extended for two years, and the gas and electricity VAT rate of 9% has also been extended until the end of 2030.

Extension of the Special Assignee Assistance Program (SARP).

The Special Assignee Assistance Program will be extended for five years, in addition to increasing the minimum qualifying income to €125,000.

Donohoe commented that they would ‘ensure aid is calibrated appropriately’ as well as ‘simplify administrative requirements’.

Foreign Earned Income Deduction (FED)

The Foreign Earned Income Reduction Scheme has been extended for five years to help support foreign investment into Ireland.

In addition to being expanded to include the Philippines and Türkiye, the level of assistance available under the scheme has also increased to €50,000.

Automatic enrollment (AE)

Auto registration, also known as automatic enrollment, is confirmed to go live on 01/01/2026.

AE is an initiative that requires employers to automatically enroll eligible employees into workplace pension schemes.

The scheme was created because too few people had sufficient pension security to allow a reasonable standard of living in retirement above state pension levels.

Benefits in the Form (BIK) taper relief

Benefits of aid in kind will be extended until 2028 in stages, with the following details:

• 2026: €10,000 extension
• 2027: €5,000 extension
• 2028: €2,500 extension
• 2029: abolished

Department of Social Protection (DSP)

Next year, Donohoe said he was allocating €28.9 billion to the Department of Social Protection.

Donohoe said: “This allocation allows me to provide an increase of €10 per week for someone receiving a weekly social protection payment.”

Navigate changes with Paycheck Plus by IRIS

As explained above, the 2026 APBN brings many changes that will have a significant impact on payroll and financial operations.

Is your business ready? At Paycheck Plus, we specialize in navigating these complex changes.

Contact us today to learn more about how we can help with these legislative changes and keep your payroll processes running smoothly.

Contact us today to get expert advice on payroll compliance and stay abreast of changes to the 2026 Budget.