NEWS

Budget 2027: 40% tax rate moves to €46,500 and heating carbon tax is cut

A €1.3 billion income tax package lifts the 40% threshold by €2,500 and each main credit by €125. Carbon tax on heating oil and gas falls to €48.50 a tonne, and the minimum wage rises to €14.94.

DáilDex · Published 6 October 2026

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At a glance

Finance Minister Simon Harris and Public Expenditure Minister Jack Chambers presented Budget 2027 in the Dáil on 6 October. RTÉ reported that the tax package is €1.65 billion, about €150 million more than expected, and that Mr Harris described the extra as additional steps to deal with energy-price shocks.

40% rate now starts at €46,500 for a single person, up from €44,000
Personal, employee (PAYE) and earned income credits each rise by €125
Home carer credit rises by €100
Ceiling of the 2% USC band rises €1,600 to €30,300
Minimum wage rises 79 cent to €14.94 an hour
Carbon tax on heating oil and gas falls from €63.50 to €48.50 a tonne

Sources:

RTÉ News

Larger package of tax measures in Budget than expected

The Irish Times

Budget 2027 main points

TheJournal.ie

Income tax band changes and fuel excise measures confirmed as ministers announce Budget 2027

Income tax, credits and USC

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Mr Harris's published statement says the standard rate cut-off point rises by €2,500 to €46,500, with proportionate increases for married couples and civil partners. The Irish Times and RTÉ both reported that the personal, employee and earned income credits each rise by €125, with RTÉ giving the new level as €2,125.

RTÉ reported that the Universal Social Charge band changes by €1,600: the ceiling of the 2% band rises from €28,700 to €30,300, which Citizens Information says keeps full-time minimum-wage workers out of the 3% band. TheJournal.ie reported that the home carer credit increases by €100 and that the childcare services relief exemption, which covers income from minding children at home, rises by €5,000 to €20,000.

Sources:

Government of Ireland (Department of Finance)

Statement by Minister Harris on Budget 2027
The Standard Rate Cut Off Point is being increased by €2,500 to €46,500 with proportionate increases for married couples and civil partners.

The Irish Times

Budget 2027 main points

RTÉ News

Larger package of tax measures in Budget than expected

TheJournal.ie

Income tax band changes and fuel excise measures confirmed as ministers announce Budget 2027

What it means for take-home pay

The Irish Times and RTÉ both reported that a single person on €50,000 would save about €750, and that a couple with a combined €100,000 would save about €1,500. The Irish Times described the gains as larger than speculated before the Budget. These figures will vary with a person's circumstances.

The saving comes from two changes. Moving €2,500 of income from the 40% rate to the 20% rate is worth up to €500 a year, and a PAYE worker also gains from the two €125 credit increases. The Irish Times also noted the package is aimed at middle earners. Sinn Féin's finance spokesperson Pearse Doherty argued that most people earning under €40,000 would gain about €250, not €750, in reaction reported by the Irish Times.

Sources:

The Irish Times (2)

RTÉ News

Larger package of tax measures in Budget than expected

Minimum wage and employer PRSI

The Irish Times reported that the national minimum wage rises 79 cent from €14.15 to €14.94 an hour. RTÉ reported that the weekly threshold at which employers pay the higher rate of PRSI rises from €552 to €600, which it said saves employers €650 to €700 a year for each employee below the threshold.

Sources:

The Irish Times

Budget 2027 main points

RTÉ News

Larger package of tax measures in Budget than expected

Carbon tax and fuel

Mr Harris said that carbon tax on home heating oil and gas is being reduced and will not rise again in the lifetime of the Government. RTÉ reported that the rate on kerosene and natural gas had been scheduled to rise twice before May 2027, to €78.50 a tonne, and will instead be cut to €48.50, which TheJournal.ie reported the Minister described as a return to 2023 levels. RTÉ reported that the scheduled 2027 increases in carbon tax on petrol, diesel and solid fuels are not part of this cut.

The Irish Times reported that the restoration of excise on petrol and diesel, due to start in November, is postponed to 28 February 2027, then phased back in over four steps until 30 June 2027. TheJournal.ie reported that no tax rise will be imposed at the pump or in the home this winter. The fuel allowance rises by €5 to €43 a week, and the Irish Times reported that the income limit for a single person aged 66 or over rises from €534 to €641.

Sources:

RTÉ News (2)

The Irish Times

Budget 2027 main points

TheJournal.ie

Income tax band changes and fuel excise measures confirmed as ministers announce Budget 2027

Other tax changes in the package

The Irish Times reported that a pack of 20 cigarettes rises by €1 in excise and that a new tax of 20 cent per ml applies to vape liquid, about 40 cent for a single-use disposable. It also reported that the standard rate of capital gains tax falls two points to 31% and that the inheritance tax threshold for gifts from parents to children rises €20,000 to €420,000.

Sources:

The Irish Times

Budget 2027 main points

What happens next

Tax changes become law through the Finance Bill, which the Oireachtas debates after the Budget. Until it passes, the figures above are Government announcements. DáilDex will update this article when the bill is published.

Sources:

RTÉ News

Larger package of tax measures in Budget than expected

The Irish Times

Budget 2027 main points

How this story was made: DáilDex drafts news automatically from official records and national reporting, then checks every cited source and quote before publishing. Read our methodology

Sources

8 sources

Official / Primary

Government of Ireland (Department of Finance) — Statement by Minister Harris on Budget 2027
“The Standard Rate Cut Off Point is being increased by €2,500 to €46,500 with proportionate increases for married couples and civil partners.”

Reporting

Written on Budget day from RTÉ, Irish Times and TheJournal.ie reporting. Where outlets differed, DáilDex used the figure that most reports agreed on. The savings figures are the media's estimates, not DáilDex's calculations. The Budget documents had not yet been checked line by line.

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At a glance

Income tax, credits and USC

Follow your representatives

What it means for take-home pay

Minimum wage and employer PRSI

Carbon tax and fuel

Other tax changes in the package

What happens next

Sources

Official / Primary

Reporting