Three separate sets of rules decide how much of your Irish salary you keep. Tax credits cut your income tax bill directly. USC is a second charge on the same income with its own bands. PRSI is social insurance that buys you cover for unemployment, illness, maternity and retirement. The three are often lumped together as "tax", but they behave differently, and knowing which is which helps you claim what you are owed and understand what you are paying for. All figures below are for the 2026 tax year.
Tax credits: money off your tax bill
A tax credit is not a deduction from income. It is subtracted from the tax you would otherwise pay, so a €2,000 credit is worth exactly €2,000 to everyone who has enough tax to use it. The credits below are the ones most newcomers can claim.
The personal and employee credits together mean a single employee pays no income tax on the first €20,000 of earnings. The Rent Tax Credit is worth 20% of rent paid up to the maximum, and Budget 2026 extended it unchanged until the end of 2028. It is not applied automatically: claim it in myAccount for the current year (which adjusts your payslips) or in your tax return for a past year. Landlords must be registered with the Residential Tenancies Board and you need their name and the RTB registration number. Other common claims are medical expenses at 20%, tuition fees, the remote working relief on 30% of electricity, heat and broadband, and flat-rate expenses for many occupations including nurses, teachers and hospitality workers.
USC: the second income charge
The Universal Social Charge was introduced in 2011 and has never been fully removed. No credits reduce it. If your total income for the year is €13,000 or less you are fully exempt. Once you pass that figure, all your income is charged, in the bands below.
| Income slice (2026) | USC rate |
| First €12,012 | 0.5% |
| €12,013 to €28,700 | 2% |
| €28,701 to €70,044 | 3% |
| Above €70,044 | 8% |
Two reduced-rate rules are worth knowing. If you are aged 70 or over, or you hold a full medical card, and your total income is €60,000 or less, you pay a maximum of 2% on anything above €12,012. Self-employed people pay an extra 3% surcharge on income over €100,000, making 11% on that slice. USC applies to employment income, benefit in kind, rental income and self-employed profits, but not to Department of Social Protection payments.
PRSI: what you pay
Pay Related Social Insurance is collected through payroll alongside tax. Almost all employees aged 16 to 70 in private industry, and most public servants recruited since 1995, are in Class A. Rates are rising a little each year until 2028 under the Government's plan to fund the State Pension.
| Class A employee PRSI | Value |
| Rate from 1 January 2026 | 4.2% of gross pay |
| Rate from 1 October 2026 | 4.35% of gross pay |
| Weekly earnings at or below €352 | No employee PRSI (employer still pays) |
| Weekly earnings €352.01 to €424 | Tapered credit of up to €12 a week reduces the charge |
| Employer contribution | 11.25% (11.40% from 1 October 2026); 9% (9.15% from 1 October 2026) on pay of €552 a week or less |
The other classes you may meet are Class S for self-employed people (4.2%, rising to 4.35%, on all income, with a minimum annual contribution), Class J for people earning under €38 a week or working past 70 (occupational injuries cover only), and Class M for people with no liability, such as those under 16. Your PRSI class appears on every payslip.
PRSI: what it entitles you to
Each week you pay Class A PRSI you earn one paid contribution. Benefits are unlocked once you have enough contributions, and a few depend on recent contributions rather than lifetime totals.
- Jobseeker's Benefit and the new Jobseeker's Pay-Related Benefit: after 104 paid contributions, if you lose your job.
- Illness Benefit: after 104 paid contributions and 39 in the relevant year, once statutory sick pay from your employer ends.
- Maternity, Paternity and Parent's Benefit: 39 contributions in the 12 months before your leave, or in the relevant tax year.
- Treatment Benefit: free dental exams, scale and polish, eye tests and hearing aid grants after a qualifying period of contributions.
- State Pension (Contributory): paid from age 66 to people with at least 520 paid contributions (10 years).
- Invalidity Pension, Carer's Benefit, Widow's or Surviving Civil Partner's Pension and the Occupational Injuries scheme.
Contributions you paid in another EU or EEA country, the UK or a country with a bilateral agreement with Ireland can be combined with Irish contributions to qualify for many of these benefits, so keep your social security records from home. You can check your Irish contribution record at any time on MyWelfare.ie once you have a verified MyGovID.
