PAYE, USC and PRSI Explained
Every Irish employee sees three main deductions on their payslip. This guide explains what each one is, how it's calculated and how much you'll pay in 2026.
Last updated: 11 October 2026
1. PAYE (income tax)
PAYE stands for Pay As You Earn. It is the system Revenue uses to collect income tax from employees through their employer each payday. Ireland has two income tax rates:
- 20% standard rate on income up to your standard rate cut-off point (SRCOP).
- 40% higher rate on everything above it.
| Personal circumstances | 20% band (2026) |
|---|---|
| Single or widowed, no dependent children | €44,000 |
| Single person child carer | €48,000 |
| Married / civil partners, one income | €53,000 |
| Married / civil partners, two incomes | €53,000, increased by the lower of €35,000 or the second earner's income (max €88,000) |
After the gross tax is worked out, your tax credits are subtracted. A single PAYE employee gets the Personal Tax Credit (€2,000) and the Employee Tax Credit (€2,000), so their tax bill is reduced by €4,000 a year. Tax credits can only reduce your tax to zero. They are not refundable. See our guide to tax credits for the full list.
2. USC (Universal Social Charge)
USC is a separate tax on gross income. Unlike PAYE, it is not reduced by pension contributions or tax credits. If your total income is €13,000 or less you pay no USC at all. Above that, every euro is charged at these rates:
| Income band (2026) | Rate |
|---|---|
| First €12,012 | 0.5% |
| €12,012.01 – €28,700 | 2% |
| €28,700.01 – €70,044 | 3% |
| Over €70,044 | 8% |
In 2025 the 2% band ended at €27,382. Budget 2026 raised it to €28,700 so that a full-time worker on the €14.15 minimum wage stays out of the 3% band. People aged 70 or over and full medical card holders with income of €60,000 or less pay a maximum of 2%. Self-employed income above €100,000 has an extra 3% surcharge.
3. PRSI (Pay Related Social Insurance)
PRSI funds social welfare payments such as the State Pension (Contributory), Jobseeker's Benefit, Illness Benefit and Maternity Benefit. Most private-sector employees pay Class A PRSI.
- If you earn €352 a week or less you pay no employee PRSI.
- Above €352, PRSI is charged on all your earnings, not just the amount above the threshold.
- Between €352.01 and €424 a week, a PRSI credit of up to €12 a week reduces the charge.
- The rate is 4.2% until 30 September 2026 and 4.35% from 1 October 2026, under the Government's PRSI roadmap.
Self-employed people pay Class S PRSI at the same rate, with a minimum annual contribution of €650.
Worked example: €60,000 salary (single, 2026)
| Item | Calculation | Annual |
|---|---|---|
| PAYE | €44,000 × 20% + €16,000 × 40% − €4,000 credits | €11,200.00 |
| USC | €60.06 + €333.76 + €939.00 | €1,332.82 |
| PRSI | €60,000 × 4.2375% (blended for the October increase) | €2,542.50 |
| Take-home | €60,000 − deductions | €44,924.68 |
Try it with your own numbers in the Irish Salary Calculator. You can add pension, bonus, a medical card or a different PRSI class.
Your marginal tax rate
If you earn above the standard rate cut-off point and more than €28,700, each extra euro you earn is taxed at 40% PAYE + 3% USC + 4.35% PRSI. That comes to 47.35%, and 52.35% once your income passes €70,044, where USC rises to 8%. This is why pension contributions, which get relief at 40%, are so valuable to higher earners.
Official sources
- Revenue: Calculating your income tax
- Revenue: Universal Social Charge
- gov.ie: Department of Social Protection (PRSI)