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Budget 2027 brings several changes that will affect employers and employees when planning their recruitment, workforce and job decisions for 2027. 

Here are some of the headline items coming from Budget 2027 that will affect employers and employees:

• Minimum wage to be increased to €14.94 per hour
• Income tax Standard Rate cut off point up by €2,500 to €46,500
• First-time buyer’s Help-To-Buy scheme increased by €5,000 to €35,000
• Childcare fees to be capped at €550 per month
• Entry threshold for the USC 3% band increased by €1,600
• Employer PRSI up from €552 to €600 per week
• Rent Tax Credit increased by €150 to €1,159 for single people and €2,300 for couples
• Capital Gains Tax standard rate reduced from 33% to 31% for small businesses
• Bank Levy extended for another year with a target yield of €200 million
• Ireland Strategic Investment Fund launching €1 billion investment programme to support growth of Irish companies

National Minimum Wage: This will increase to €14.94 per hour, which may have a knock-on effect on salary expectations across a wider range of roles. Employers need to review pay structures to ensure there is a clear difference between positions, contacts and salary ranges.

Taxation: Changes to income tax and tax credits should also improve take-home pay for many employees. However, increases in PRSI and other employment costs mean businesses will need to look beyond the advertised salary when calculating the overall cost of hiring.

The main points from the Budget 2027:
• 40% income tax threshold rises from €44,000 to €46,500: For example, a single employee can now earn an additional €2,500 before their income above the threshold is taxed at 40%. This particularly benefits workers earning above €44,000.
• PAYE tax credit rises by €125: This means that employees paying PAYE income tax will have €125 more deducted from their annual income-tax bill.
• Personal tax credit rises by €125: Eligible taxpayers get another €125 reduction in their annual income-tax liability.
• USC 2% band increases to €30,300: With this change, more of your income will remain within the 2% USC band, before moving into the higher USC rate. This will slightly reduce USC for people earning above that level.

What to Consider: For employers and SME’s, this makes salary benchmarking and realistic workforce planning more important. Businesses need to understand what candidates expect in the current market. Balancing those expectations against the total cost of employment will be key to attracting and retaining the right people.

For businesses planning to recruit in now and into 2027, early conversations around salary, candidate availability and workforce requirements will help ensure recruitment budgets are realistic and roles remain competitive in a competitive jobs market.