How tax credits work
Income tax in Ireland is worked out in two steps:
- Your income is taxed at 20% up to your standard rate band (€44,000 for a single person in 2026), and at 40% above it.
- Your tax credits are then taken off the total.
Example: on €36,000, the tax is 20% of €36,000, which is €7,200. Take off €4,000 of credits, and you pay €3,200 for the year.
Tax credits only reduce income tax. USC and PRSI are worked out separately. (What is USC?)
The main tax credits and rate bands
| Tax credit | 2026 | 2027 (Budget plans) |
|---|---|---|
| Personal: single | €2,000 | €2,125 |
| Personal: married or civil partners | €4,000 | €4,250 |
| Employee (PAYE) | €2,000 | €2,125 |
| Earned income (self-employed) | €2,000 | €2,125 |
| Home carer | €1,950 | €2,050 |
| Standard rate band (taxed at 20%) | 2026 | 2027 (Budget plans) |
|---|---|---|
| Single | €44,000 | €46,500 |
| Married or civil partners, one income | €53,000 | €55,500 |
| Married or civil partners, two incomes | up to €88,000 | up to €93,000 |
Single parents get a band of €48,000 in 2026. The 2027 figures were announced in Budget 2027 and still have to become law.
Your RPN: how your employer knows your credits
Revenue sends your employer a Revenue Payroll Notification (RPN). It shows:
- your tax credits and standard rate band, for the year and for each pay
- your USC rates and bands
- whether you’re on the cumulative or Week 1 basis
- any Local Property Tax to take from your pay
You can see the same details in myAccount, on your Tax Credit Certificate.
Cumulative basis (the normal one): each pay, your tax is worked out on everything you’ve earned since 1 January, against your credits and band up to that point. If you paid too much earlier in the year, for example on emergency tax, it comes back automatically.
Week 1 basis: each pay is taxed on its own, with one week’s or month’s share of your credits and band. Tax you overpaid earlier isn’t refunded through your pay until Revenue puts you back on the cumulative basis.
Two jobs
Your credits and rate band are shared between your jobs, not given in full to each one. In myAccount, under Manage your tax, you can choose how to split them, for example 70% to your main job and 30% to the other. A job with no credits or rate band given to it is taxed at 40%.
Married couples and civil partners
If you’re jointly assessed:
- the personal tax credit of €4,000 (€4,250 in 2027) can be split between you however you like
- with one income, you get a band of €53,000 (€55,500 in 2027), €9,000 more than a single person
- with two incomes, the band can be up to €88,000 (€93,000 in 2027), depending on what the lower earner earns
- the employee and earned income credits belong to each person and can’t be moved
Emergency tax
Emergency tax is used when your employer doesn’t have an RPN for you, usually in the first weeks of a new job or your first job.
If you’ve given your employer your PPSN:
- Weeks 1 to 4 (or month 1): 20% on pay up to one week’s or month’s share of the single rate band (about €846 a week, or €3,667 a month), 40% above that, and no tax credits
- From week 5 (or month 2): 40% on all your pay, still with no tax credits
If you haven’t given your PPSN, it’s 40% on all your pay from the start.
In both cases, USC is 8% on all your pay. PRSI isn’t affected.
- Month 1 €522 more
- With your RPN: €318 Emergency tax: €840
- Month 2 onwards €1,122 more
- With your RPN: €318 Emergency tax: €1,440
Up to €1,122 more taken from each month’s pay
PRSI is the same either way. Once your employer gets your RPN, the extra tax comes back in your next pay.
How to get off emergency tax
- Give your employer your PPSN.
- Add the job in Revenue myAccount: go to PAYE Services, then Manage your tax, then Add Job or Pension, and enter your employer’s registration number and your start date. Your employer can also register the job for you.
- Revenue sends your employer an RPN with your credits and rate band.
- Your next pay is worked out on the cumulative basis from 1 January, so the overpaid income tax and USC are refunded in that pay.
If you leave the job, or the year ends before this happens, request a Statement of Liability in myAccount after the end of the year to get the money back.
Other credits and reliefs
- Single Person Child Carer credit: €1,900 for a single parent whose child lives with them, along with the bigger €48,000 rate band.
- Home carer credit: €1,950 (€2,050 in 2027) for a jointly assessed couple where one partner stays at home to care for children, an older person or someone who’s incapacitated. It’s reduced if the carer earns more than a small amount.
- Age credit: €245 (€490 for a married couple) from the year you or your spouse turn 65.
- Rent tax credit: for people who rent their home, rising to €1,150 a year (€2,300 for a couple) in 2027 and 2028.
- Medical expenses: 20% back on GP, consultant, prescription and some dental costs that weren’t paid back to you. Nursing home fees get relief at your highest rate, up to 40%.
- Flat-rate expenses: a set amount for certain jobs, such as nurses, teachers and hotel staff, taken off your taxable pay without receipts.
- Tuition fees: 20% back on college fees up to €7,000 per course. The first €3,000 of each claim (€1,500 for part-time courses) isn’t covered.
You claim most of these in Revenue myAccount.
See it in your pay
Our salary calculator shows your income tax, USC and PRSI after the personal and employee tax credits. Choose the tax year to see 2026, or 2027 under the Budget 2027 plans. See all the rates on Irish tax rates 2026.