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Irish Budget 2027 Hub

Azets Ireland's Budget 2027 knowledge centre delivers expert tax analysis, practical policy commentary, and strategic guidance to help Irish businesses navigate changes and protect growth.

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Budget 2027 was delivered on Tuesday 6 October 2026 by Tánaiste and Minister for Finance Simon Harris and Public Expenditure Minister Jack Chambers. The Government confirmed an overall package of €8.5 billion, including a €1.3 billion personal tax package and targeted business measures. While the headline fiscal package is tighter than in previous years, the specific changes to income tax bands, USC, Capital Gains Tax, and business incentives will directly affect the bottom line of Irish businesses.

Our tax specialists are following every development. Below you will find our comprehensive breakdown of the key announcements, what they mean for you, and the practical steps to take before the new tax year begins.

Key dates

  • 6 October 2026:
    • Budget Day: Official announcements and legislation published.
  • 7 October 2026:
    • Capital Gains Tax cut takes effect: Standard Capital Gains Tax rate falls from 33% to 31%.
  • 1 January 2027:
    • Tax year 2027 commences: New income tax bands, credits, minimum wage and USC adjustments apply to payroll.

Budget 2027 at a glance

  • Higher rate income tax threshold: The 40% income tax entry point rises by €2,500 from €44,000 to €46,500 for single earners (€55,500 for married one-earner couples).
  • Core tax credits: Personal tax credit, PAYE employee credit, and Earned Income Credit each increase by €125 to €2,125.
  • USC rate adjustment: The 2% Universal Social Charge threshold expands by €1,600 to €30,300, keeping pace with minimum wage increases.
  • Capital Gains Tax (CGT): Standard CGT rate reduced from 33% to 31% with immediate effect from 7 October 2026.
  • Minimum wage: The national minimum wage will increase by 79 cents to €14.94 per hour from 1 January 2027.

What Budget 2027 means for your business

With a tight fiscal envelope focused on competitiveness rather than general corporate rate reductions, the detail in Budget 2027 is critical for business planning, payroll budgets, and transaction timing.

1. Capital gains & business disposal

The reduction of the standard CGT rate to 31% (effective 7 October 2026) offers immediate value for business sales, asset disposals, and corporate restructures. If you are planning an exit or succession move, reviewing your timing can optimise tax leakage.

2. Employer costs & PRSI

Between the statutory PRSI increase to 4.35% and adjustments to wage thresholds, payroll costs will rise in 2027. Employers must review compensation structures and update payroll systems ahead of January 1.

3. Investment incentives and R&D

The Budget maintains and enhances key targeted reliefs, including R&D tax incentives and equity investment schemes designed to reward entrepreneurship and keep growing businesses rooted in Ireland.

What Budget 2027 means for succession, capital taxes & personal wealth

  • Capital Acquisitions Tax (CAT) group thresholds: Group A threshold increased from €400,000 to €420,000 for parent-to-child transfers, alongside increases to Group B (€44,000) and Group C (€22,000). Essential for family business succession and estate planning.
  • Capital Gains Tax (CGT) cut to 31%: Applies immediately to individual share sales, investment property disposals, and personal asset transactions.
  • New Personal Investment Account & fund exit tax cut: Reduction of Exit Tax on life assurance and investment funds from 38% to 35%, plus the new Personal Investment Account structure launching mid-2027 (tax-free up to €50k).
  • High-earner & executive payroll impact: Income tax band expansion to €46,500 and USC threshold adjustments, impacting executive remuneration, pension capping, and proprietary director tax structures.

What Budget 2027 means for employers, payroll & workforce strategy

  • Executive & employee share schemes: Updates to Key Employee Engagement Programme (KEEP), unapproved share options, and BIK exemptions.
  • Payroll & workforce costs: Strategic guidance on managing mandatory PRSI rate increases (from 4.2% to 4.35%) and national minimum wage flow-throughs across mid-market payrolls.
  • International mobility & global mobility tax: Inbound executive reliefs (SARP) and cross-border worker updates.

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Navigate Budget 2027 with confidence

Budget 2027 introduces critical updates to tax, employer PRSI, capital reliefs, and succession thresholds. Our tax specialists can help you assess the immediate impact on your business, structure, or private wealth - and plan your next steps with confidence.

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Budget 2027 FAQs

  • 7 October 2026: The standard Capital Gains Tax (CGT) rate cut to 31% and updated Capital Acquisitions Tax (CAT) inheritance thresholds take effect immediately for disposals and gifts.
  • 1 January 2027: Income tax band expansions (up to €46,500), USC adjustments (2% ceiling to €30,300), tax credit increases (+€125), and employer PRSI threshold updates (€600/week) apply to payroll.
  • Mid-2027: The new tax-advantaged Personal Investment Account structure and revised fund exit taxes go live.

While the National Minimum Wage rises by 79c to €14.94/hour and the employee statutory PRSI rate increased to 4.35%, Budget 2027 includes targeted employer mitigation:

  • Employer PRSI relief threshold: The weekly income threshold before the higher 11.05% Employer PRSI kicks in rises from €552 to €600 per week. This protects employers from higher payroll costs on full-time minimum wage staff, saving approximately €650 to €700 per employee annually.
  • Payroll action item: Employers should update payroll software thresholds ahead of 1 January 2027 to ensure accurate tax withholding and benefit calculations.

The standard rate of Capital Gains Tax in Ireland has been cut from 33% to 31% for disposals occurring on or after 7 October 2026.

  • Strategic impact: For business owners contemplating an exit, corporate restructuring, or asset sale, this 2% reduction lowers transaction tax friction immediately.
  • Incentive schemes: Revised provisions surrounding Angel Investor Relief and EII schemes continue to offer enhanced effective CGT rates for qualifying innovation investments.

For gifts and inheritances taken on or after 7 October 2026, Capital Acquisitions Tax (CAT) tax-free thresholds have increased across all three groups:

  • Group A (parent to child): Increased by €20,000 to €420,000.
  • Group B (siblings, nieces, nephews, grandchildren): Increased to €44,000.
  • Group C (All other relationships): Increased to €22,000.

To support innovation in mid-market enterprises and technology firms, the government confirmed key enhancements to Ireland's R&D tax credit regime:

  • Higher first-year payment threshold: The immediate cash refund threshold increases from €87,500 to €105,000, delivering faster liquidity to companies undertaking smaller or early-stage R&D projects.
  • Expanded subcontracting limits: Limits for subcontracting qualifying R&D work to third-level institutions (increased to 20%) and third parties (increased to €200,000) have expanded, allowing greater flexibility in collaborative research.

For higher earners and executive directors, Budget 2027 focuses on entry-point adjustments and credit expansions:

  • Higher rate threshold: The 40% income tax entry threshold increases by €2,500 from €44,000 to €46,500 for single earners (€55,500 for married one-earner couples).
  • USC & Credits: The 2% USC rate ceiling expands to €30,300, while core Personal, PAYE, and Earned Income Credits increase by €125 each to €2,125.
  • Profit extraction & pensions: These band adjustments alter executive net remuneration models and interact directly with proprietary director pension capping and dividend extraction strategies.

No. The rise in employee PRSI from 4.2% to 4.35% on 1 October 2026 was legislated separately and applies regardless of what is announced on budget day.

Irish budgets are named after the tax year they apply to. Budget 2027 sets out tax and spending plans for 2027.

Azets Ireland provides tailored advisory across corporate tax, employment tax, workforce reward, and private client wealth. Our specialists assist mid-market companies and entrepreneurs with:

  • Quantifying exact 2027 payroll and PRSI changes.
  • Modelling business disposal timing under the new 31% CGT rate.
  • Structuring family business succession using updated CAT Group thresholds.
  • Maximising corporate R&D tax credit claims and innovation incentives.

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