- Employee PRSI rises from 4.20% to 4.35% on 1 October 2026, costing an extra €75 per year on a €50,000 salary
- This is part of a legislated five-step roadmap that will bring the rate to 4.70% by October 2028
- Employers also pay more: the higher rate rises to 11.40% and the lower rate to 9.15%
- Self-employed workers (Class S) face the same rate increases as PAYE employees
In exactly five months, every payslip in Ireland will look a little different. On 1 October 2026, PRSI (Pay Related Social Insurance) rates are going up for employees, employers, and the self-employed. If you want to understand how your tax bill is calculated from top to bottom, our guide to how Irish income tax is calculated covers the full picture. This post focuses specifically on PRSI: what is changing, by how much, and what you should do before October arrives.
What Is PRSI and Why Does It Matter?
PRSI (Pay Related Social Insurance) is a social insurance contribution deducted from your pay every week. Unlike income tax, it does not go to the general Exchequer. It funds the Social Insurance Fund, which pays for benefits including the State Pension (Contributory), Jobseeker's Benefit, and Illness Benefit.
For most PAYE workers, PRSI is collected under Class A. The rate applies to all earnings above €352 per week, with no upper ceiling. That means every euro of salary above that threshold is subject to PRSI.
What Exactly Is Changing on 1 October 2026?
On 1 October 2026, the following PRSI rates will increase under changes already legislated through the Social Welfare (Miscellaneous Provisions) Act 2024:
| PRSI Component | Current Rate | Rate from 1 Oct 2026 |
|---|---|---|
| Employee (Class A) | 4.20% | 4.35% |
| Self-Employed (Class S) | 4.20% | 4.35% |
| Employer — higher rate | 11.25% | 11.40% |
| Employer — lower rate | 9.00% | 9.15% |
The employer lower rate applies to employees earning up to €552 per week. Above that, the higher employer rate applies. According to Citizens Information, employees earning €352 or less per week remain exempt from PRSI.
The Multi-Year PRSI Roadmap: Already Written Into Law
This is not a one-off Budget measure. The full schedule of increases is locked into legislation and will take effect automatically each October through 2028. Here is the complete roadmap from gov.ie:
| Date | Employee and Class S Rate | Employer Higher Rate | Employer Lower Rate |
|---|---|---|---|
| Pre-October 2024 (baseline) | 4.00% | 11.05% | 8.80% |
| 1 October 2024 | 4.10% | 11.15% | 8.90% |
| 1 October 2025 | 4.20% | 11.25% | 9.00% |
| 1 October 2026 | 4.35% | 11.40% | 9.15% |
| 1 October 2027 | 4.50% | 11.55% | 9.30% |
| 1 October 2028 | 4.70% | 11.75% | 9.50% |
By October 2028, employee PRSI will be 0.70 percentage points higher than it was in 2023. That is the total cost of the roadmap, fully legislated and not subject to annual Budget debate.
The increases are designed to keep the State Pension age at 66, address the long-term sustainability of the Social Insurance Fund, and fund the new Pay-Related Jobseeker's Benefit, which was introduced in 2024 and pays up to 60% of prior earnings for the first three months of unemployment.
How Much Will the October 2026 Increase Actually Cost You?
The 0.15 percentage point rise sounds small. The real-world impact depends on your salary.
Worked Example: Three Salary Levels
| Annual Salary | PRSI Before (4.20%) | PRSI After (4.35%) | Extra per Year | Extra per Month |
|---|---|---|---|---|
| €30,000 | €1,260 | €1,305 | +€45 | +€3.75 |
| €50,000 | €2,100 | €2,175 | +€75 | +€6.25 |
| €75,000 | €3,150 | €3,262.50 | +€112.50 | +€9.38 |
These figures assume the full year at the new rate. In practice, the new rate only applies from 1 October 2026, so the actual additional cost in the 2026 calendar year will be approximately one quarter of the annual amounts above.
For a precise estimate of your total take-home pay including income tax, USC, and PRSI, use our Irish income tax calculator.
What Does This Mean for Employers?
Employers pay PRSI on top of what employees contribute. This is a separate, additional cost to the business on every payroll run.
From 1 October 2026, employer PRSI rises to:
- 11.40% on weekly earnings above €552
- 9.15% on weekly earnings up to €552
For a business with 10 employees each earning €50,000, the October 2026 increase adds roughly €750 per year to the total payroll cost (10 × €75). For larger organisations, the cumulative cost of the full 2024-to-2028 roadmap is material and worth factoring into salary planning now.
The 2026 employee threshold of €552 per week was specifically set to ensure that workers earning the National Minimum Wage fall within the lower employer PRSI band, as noted in Budget 2026 documentation from KPMG.
What Do Self-Employed Workers Need to Know?
If you are self-employed, a sole trader, or a proprietary company director, you pay Class S PRSI. The rate is the same as Class A employees: it rises from 4.20% to 4.35% on 1 October 2026.
There is one important difference in how the mid-year change applies. Because self-employed workers pay PRSI annually through the self-assessment system rather than weekly through payroll, a blended rate of 4.2375% applies to the 2026 tax year as a whole (4.20% for nine months, 4.35% for three months).
Other Class S rules that remain unchanged:
- PRSI applies to all reckonable income above €5,000 per year
- The minimum annual PRSI payment for self-employed workers is €650
- No employer contribution applies — you pay both sides yourself
For a full breakdown of your self-employed tax obligations, including income tax, USC, and preliminary tax, see our Freelancer and Self-Employed Tax Guide for Ireland.
What Should You Do Now?
The increase is five months away. Here is what you can do today to prepare:
1. Check your current payslip Confirm that your employer is applying the correct current rate of 4.20% to your PRSI deduction. Errors in payroll do happen, and catching them now avoids a year-end correction.
2. Adjust your monthly budget The October increase is modest on its own, but combined with the 2027 and 2028 steps it adds up. Budget for a take-home reduction of €3 to €10 per month from October depending on your salary.
3. Offset the increase by claiming all tax credits you are entitled to PRSI is not reduced by tax credits, but your income tax bill is. Many PAYE workers are missing credits that would more than cancel out this increase. Our guide to tax credits every PAYE worker should be claiming is a good starting point.
4. If you are self-employed, factor the blended rate into your preliminary tax calculation Preliminary tax for 2026 must be paid by 31 October 2026 (or 16 November via ROS). Use 4.2375% for your 2026 PRSI estimate rather than the flat current or new rate.
5. Employers: review your payroll software Most Irish payroll platforms (Sage, Brightpay, Thesaurus) update PRSI rates automatically, but verify this with your provider before the October payroll run. The rate must switch mid-month for October payrolls processed after 1 October 2026.
Frequently Asked Questions
Does the PRSI rate increase affect everyone in Ireland? Almost everyone in employment or self-employment is affected. The main exceptions are employees earning €352 or less per week (exempt from PRSI entirely), people aged 70 or over (fully exempt from PRSI), and recipients of the State Pension Contributory (exempt once the pension is awarded). Modified-rate contributors such as pre-1995 civil servants also see the same percentage-point increases applied to their class rates.
Will the PRSI rate keep going up after 2028? The increases legislated under the Social Welfare (Miscellaneous Provisions) Act 2024 run to October 2028, when the employee rate reaches 4.70%. There is no legislated increase beyond 2028, though future Budgets could introduce further changes. The stated purpose of the current roadmap is to stabilise the Social Insurance Fund and maintain the State Pension age at 66.
Is PRSI the same as income tax? No. PRSI and income tax are separate deductions. Income tax goes to the Exchequer and funds general government spending. PRSI goes to the Social Insurance Fund and pays for specific benefits like the State Pension, Jobseeker's Benefit, and Maternity Benefit. Tax credits reduce your income tax bill but have no effect on PRSI, which is charged at a flat rate with no credit mechanism.
My employer pays my PRSI — do I still need to worry about this? Your employer pays the employer's share on top of your salary, but the employee share (which is rising from 4.20% to 4.35%) is deducted from your gross pay before you receive it. So yes, your net take-home pay will be slightly lower from October 2026 as a result. Your employer's additional cost is separate and on top of that.
I am self-employed and file a Form 11. What rate do I use for 2026? For your 2026 self-assessment return, use a blended annual rate of approximately 4.2375% (4.20% for January to September, 4.35% for October to December). When estimating preliminary tax due by 31 October 2026, apply this blended rate to your expected 2026 reckonable income to avoid underpayment.
This article is for informational and estimation purposes only. It does not constitute professional tax advice. Tax rules can change. Always check Revenue.ie for the latest figures or consult a qualified tax advisor for your specific situation.
Written by a Chartered Accountant
All guides on Irish Tax Estimator are written and reviewed by a qualified Irish Chartered Accountant to ensure accuracy. This article is for general information only and does not constitute professional tax advice.