Budget 2027 has brought a range of changes that will have implications for both businesses and employees as they look ahead to 2027. While the announcements may not have addressed every challenge facing SMEs, there are several measures worth looking at, particularly when it comes to employment costs, take-home pay and future career decisions.

For businesses, changes to the minimum wage, employer PRSI and business investment supports are important to consider when looking at recruitment budgets, salary structures and plans for growth as we look towards 2027. For employees and potential candidates, adjustments to income tax and tax credits are likely to affect take-home pay, while changes to the minimum wage may influence salary expectations across different roles.

Understanding these new announcements are important for employers to help make more informed decisions about hiring, business planning and retaining talent in their workforce. Likewise for those considering a career move or exploring new opportunities, being aware of the newly announced changes are important when assessing salary offers and future prospects.

Whether you’re an employer planning your recruitment strategy or a candidate considering your next career move, we’ve broken out some of the key Budget 2027 announcements and what they could mean for you.

Budget 2027: Employers & 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
• 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 may need review pay structures to ensure there is a clear difference between positions, contacts and salary ranges.

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

Budget 2027 Details:
• 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 than ever. Businesses will need to be conscious of 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.

For more information on the Government announcement, click here to see full Budget 2027 details.

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