Budget 2027: Ireland reveals €1.3bn tax package

Budget 2027 delivers €1.3bn in tax cuts, employer PRSI relief, higher inheritance tax thresholds and major infrastructure investment plans.

In his Budget 2027 speech, Finance Minister and Tánaiste Simon Harris, TD, said that the measures will reward work, support businesses and invest for the future, with tax cuts, infrastructure spending and a strong Future Ireland Fund.

The Government today (6 October 2027) unveiled a €1.3 billion personal tax package, increased inheritance tax thresholds, and new supports for employers as part of Budget 2027, while reaffirming its commitment to maintaining budget surpluses in and investing in infrastructure.

Minister Harris said that the package was designed to help workers, support economic growth and prepare the country for future challenges.

KEY NUMBERS: Budget 2027

An optimistic path

He described the Budget as setting Ireland on an optimistic path “that brings us to a place where work is rewarded, risk is repaid and investments in our future bear fruit for decades to come.

He said that the Budget had been shaped by volatility in global energy markets, geopolitical uncertainty and rising borrowing costs internationally.

Despite those pressures, he pointed to what he described as the resilience of the Irish economy, highlighting record employment levels, wage growth and continued economic expansion.

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Ireland now has more than 2.8 million people in employment and has experienced four-and-a-half years of full employment, while wages have risen by an average of 4.5% a year over the past four years, he said

The Department of Finance is forecasting that a further 53,000 jobs will be added next year, while Modified Domestic Demand is expected to grow by 3% in 2027.

On the public finances, Harris said the State expects to record a budget surplus of €6.7 billion this year and €9.5 billion next year. He said these surpluses will allow Ireland to build resilience against future economic shocks and fund major long-term investments.

On the public finances, Harris said the State expects to record a budget surplus of €6.7 billion this year and €9.5 billion next year. He said these surpluses will allow Ireland to build resilience against future economic shocks and fund major long-term investments.

“We will invest over a quarter of a trillion euros in infrastructure over the next 10 years,” he told the Dáil. “We will continue to run budgetary surpluses for the remainder of this Government’s term of office.”

The Minister also announced an additional €1 billion allocation to the Future Ireland Fund in 2027, on top of the planned transfer of approximately €4.8 billion. 

A central feature of the Budget is a €1.3 billion income tax package aimed at easing the burden on workers. Harris announced an increase of €2,500 in the Standard Rate Cut Off Point, bringing it to €46,500, alongside increases in the Personal, Employee and Earned Income Tax Credits of €125 each. The Home Carer Tax Credit will rise by €100.

The threshold for the 3% USC band will also increase from €28,700 to €30,300. According to the Minister, the changes mean a worker earning €50,000 annually will pay more than €700 less in income tax and USC, while a couple earning €100,000 between them will pay around €1,500 less. 

“It is those in the middle that can often feel the squeeze,” Harris said. “Too many people are working hard, earning good money and feeling like they’re just about getting by. Through this and future budgets, we want to change that.”

Budget 2027 also includes the introduction of a new Investment Account, a tax-efficient savings and investment vehicle aimed at encouraging greater participation in capital markets. Announced as part of the Government’s wider retail investment reform agenda, the account is intended to provide individuals with a simpler way to invest while reducing administrative complexity for savers.

Measures for businesses

The Budget also contains measures aimed at businesses. To help offset the impact of planned increases in the National Minimum Wage, the Government will increase the employer PRSI threshold from €552 to €600 per week from 2027. Harris said the measure would reduce employers’ PRSI costs by between €650 and €700 annually for each employee below the new threshold.  

The Minister said the Government remains focused on ensuring work pays while supporting businesses that create jobs and economic activity.

Changes were also announced to Capital Acquisitions Tax thresholds. The Group A threshold, which primarily applies to inheritances and gifts from parents to children, will increase from €400,000 to €420,000. The Group B threshold will rise from €40,000 to €44,000, while the Group C threshold will increase from €20,000 to €22,000.

Looking beyond the headline measures, Harris said the Government would examine how to improve labour market participation among people with disabilities and remove barriers to employment.

Summing up the Government’s approach, he said today’s budget seeks to balance immediate support for households and businesses with long-term investments to strengthen Ireland’s economy and public finances. “People need to feel the benefits of economic growth in their daily lives and in their pockets,” he said.

Budget 2027: Key takeaways

Economic outlook

• The Government presented Budget 2027 against a backdrop of global uncertainty, citing:
  • Energy market volatility and higher energy prices.
  • Geopolitical instability and trade disruption.
  • Rising borrowing costs in international bond markets. [gov.ie]
• Despite these challenges, Harris argued that Ireland remains economically resilient, with:
  • More than 2.8 million people employed.
  • Full employment for over four years.
  • Wage growth averaging 4.5% annually over the past four years.
  • Forecast domestic economic growth of 3% in 2027 and 53,000 additional jobs next year.

Public finances

• Ireland is expected to record a budget surplus of:
  • €6.7 billion in 2026.
  • €9.5 billion in 2027.  
• The Government intends to:
  • Continue running budget surpluses.
  • Invest more than €250 billion in infrastructure over the next decade.
  • Add an extra €1 billion to the Future Ireland Fund in 2027, on top of planned contributions of about €4.8 billion.

Income tax and cost-of-living measures

• A €1.3 billion personal income tax package was announced.
• Key tax changes include:
  • Raising the standard-rate income tax band by €2,500 to €46,500.
  • Increasing Personal, Employee and Earned Income tax credits by €125.
  • Increasing the Home Carer Tax Credit by €100.
  • Increasing the USC 3% threshold from €28,700 to €30,300.
• The Government estimates:
  • A worker earning €50,000 will pay more than €700 less in income tax and USC.
  • A dual-income couple earning €100,000 combined will pay around €1,500 less.

Business supports

• To offset the impact of minimum wage increases on employers:
  • The employer PRSI threshold will rise from €552 to €600 per week in 2027.
  • This is expected to save employers between €650 and €700 per eligible employee annually.
• Harris positioned the budget as one focused on rewarding work, supporting enterprise and encouraging private-sector investment.

Workforce participation

• The Minister highlighted the need to increase employment participation among people with disabilities.
• Government will examine measures to:
  • Support disabled people already in employment.
  • Remove barriers preventing others from entering or remaining in the workforce.

Inheritance and gifting tax

• Capital Acquisitions Tax thresholds are being increased:
  • Group A (parent-to-child): €400,000 → €420,000.
  • Group B: €40,000 → €44,000.
  • Group C: €20,000 → €22,000.

Image at top: Finance Minister Simon Harris speaking at a Scale Ireland event in September 2027

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