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

The 2026 Budget is the first under a new Government, and has been described as ‘sensible’ with the goal to ‘protect jobs and protect growth’, according to the Government.

This may come as a relief to some, given the uncertain global economy; however, opposition members have branded this Budget as ‘disappointing’, claiming ordinary people are being ‘left in the cold’.

Whatever your view, one thing remains certain: to remain compliant, businesses must adapt to the changes. 

So, to keep you up to date, in this blog, we’ve run through the key aspects of the 2026 Budget, highlighting changes and how they will directly affect payroll and finance.

National Minimum Wage (NMW) increase

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

Linked to this, the ceiling for the Universal Social Charge (USC) 2% rate band will be increased by €1,318 to €28,700.

Paschal Donohoe, Minister for Finance, said: “This increase will ensure that full-time workers on the minimum wage will remain outside the top rates of USC, while also giving a modest benefit to all workers whose income is above that amount.”

Rent Tax Credit extension

The Rent Tax Credit has been extended for three years, to the end of 2028, with Donohoe stating that almost 400,000 people benefited from it in 2023.

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

Special Assignee Relief Programme (SARP) extension

The Special Assignee Relief Programme is to be extended for five years, in addition to increasing the minimum qualifying income to €125,000.

Donohoe commented that they will ‘ensure relief is appropriately calibrated’ as well as ‘simplifying the administrative requirements’.

Foreign Earnings Deduction (FED)

The Foreign Earnings Deduction scheme is being extended for five years to help support foreign investment into Ireland.

As well as being extended to include the Philippines and Türkiye, the level of relief available under the scheme is also increasing to €50,000.

Auto enrolment (AE)

Auto enrolment, also known as automatic enrolment, is confirmed to go live 01/01/2026.

AE is an initiative that requires employers to automatically enrol eligible employees into a workplace pension scheme.

The scheme has been created because too few people have sufficient pension coverage to enable a reasonable standard of living in retirement above the level of the state pension.

Benefits in Kind (BIK) relief taper

Benefits in Kind relief will be extended to 2028 on a taper basis, moving as follows:

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

Department of Social Protection (DSP)

Next Year, Donohoe said he is 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 a person receiving a weekly social protection payment.”

Navigating change with Paycheck Plus by IRIS

As highlighted above, the 2026 Budget brings numerous changes that will significantly impact payroll and finance operations.

Is your business prepared? At Paycheck Plus, we specialise in navigating these complex changes.

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

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

Stephanie Coward

Managing Director for HCM

Stephanie Coward is Managing Director for HCM at IRIS, where she leads the strategy, innovation and growth of the organisation’s HR and payroll portfolio. She is responsible for positioning IRIS as a trusted partner to HR professionals and ensuring its solutions support the evolving needs of modern workforces.

With more than 25 years’ experience in the technology sector, Stephanie brings deep commercial and operational expertise, with a passion for improving the employee experience through technology.

Stephanie is committed to advancing IRIS’ HCM offering and helping organisations build more resilient, empowered workforces.