USC and PRSI in Ireland (2026): Rates, Thresholds and the October Rate Rise
Ireland's two main social levies are the Universal Social Charge (USC) and Pay Related Social Insurance (PRSI). In 2026, employees pay USC at rates from 0.5% to 8% on different slices of income, plus PRSI Class A at 4.2% on weekly earnings above EUR 352. Both rates rise by 0.15 percentage points from 1 October 2026.
The Universal Social Charge: bands and rates for 2026
The Universal Social Charge (USC) is a charge on income that applies in addition to income tax and PRSI. It is levied on gross income before pension contributions -- unlike income tax, it cannot be reduced by pension relief. For 2026, USC applies in four bands: 0.5% on income from EUR 0 to EUR 12,012. 2% on income from EUR 12,012 to EUR 28,700. 3% on income from EUR 28,700 to EUR 70,044. 8% on income above EUR 70,044. Note that Budget 2026 raised the 2% band ceiling from EUR 27,382 to EUR 28,700, meaning slightly more income is taxed at 2% rather than 3% compared to 2025. USC applies from the first euro once total income for the year exceeds EUR 13,000. If your total income is EUR 13,000 or less, you are fully exempt. The EUR 13,000 exemption is a cliff edge: earning even EUR 1 above it means USC applies from the bottom band upward on the full income amount. Revenue.ie administers USC alongside PAYE and publishes an online USC calculator. Citizens Information (citizensinformation.ie) provides plain-language explanations of when USC applies and who qualifies for reduced rates.
USC exemptions and reduced rates
Not everyone pays USC at the standard four-band rates. Two groups qualify for a reduced USC structure in 2026: Full medical card holders: Individuals holding a full medical card (not a GP visit card only) and whose income does not exceed EUR 60,000 per year pay USC at a maximum of 2% -- that is, 0.5% on the first EUR 12,012 and 2% on the remainder up to EUR 60,000. The 3% and 8% bands do not apply. People aged 70 and over: Individuals aged 70 or older with income not exceeding EUR 60,000 per year pay USC at the same reduced maximum of 2%. If you are 70 or over or hold a full medical card but your income exceeds EUR 60,000, the full standard four-band rates apply from the first euro with no reduction. Certain income types are exempt from USC regardless of the amount -- for example, most Department of Social Protection payments and income already subject to DIRT (Deposit Interest Retention Tax). Revenue.ie and citizensinformation.ie publish the complete list of USC-exempt income sources.
PRSI Class A: employee rates, thresholds and the tapered credit
Pay Related Social Insurance (PRSI) funds the social insurance system, providing entitlement to benefits including the State Contributory Pension, Jobseekers Benefit, Illness Benefit, and Maternity Benefit. Most private-sector employees pay PRSI under Class A. For 2026, Class A PRSI is charged at 4.2% on all earnings for employees whose weekly earnings exceed EUR 352 (approximately EUR 18,304 annually). There is no upper earnings ceiling -- unlike some other countries' social insurance systems, PRSI Class A applies to the full amount of earnings with no cap. If weekly earnings are EUR 352 or less, no employee PRSI is deducted for that week. For weekly earnings between EUR 352.01 and EUR 424, a tapered PRSI credit applies, reducing the PRSI that would otherwise be due. The maximum credit is EUR 12 per week at the lower end of the band, tapering to zero at EUR 424. Above EUR 424 per week, the full 4.2% applies on all earnings with no credit. Employer PRSI (Class A) is a separate cost borne by the employer and is not deducted from the employee's pay. From January 2026, the employer rates are approximately 9.0% on weekly earnings up to EUR 441 and 11.25% on weekly earnings above that threshold. These are costs to the business, not deductions from the employee. Revenue.ie and the Department of Social Protection (gov.ie) publish the current PRSI class rates.
The October 2026 rate increase and what it means for payslips
As part of a phased multi-year plan to strengthen the social insurance fund and support State pension sustainability, all PRSI rates are increasing by 0.15 percentage points from 1 October 2026. For employees on Class A, the employee rate moves from 4.2% to 4.35% on earnings above EUR 352 per week from 1 October 2026 onward. For the 2026 calendar year as a whole, this means nine months at 4.2% and three months at 4.35%. Self-employed PRSI (Class S) similarly rises from approximately 4.2% to 4.35% from 1 October 2026. USC rates are not affected by this change -- the October 2026 adjustment is PRSI-specific. Employers must update payroll software from 1 October 2026 to apply the new 4.35% rate. Employees will notice a small increase in the PRSI line of their October payslip and subsequent months. Revenue.ie will issue updated employer guidance and Revenue Payroll Notifications ahead of October 2026. This guide is informational; always verify current rates with Revenue.ie or a qualified payroll professional.
FAQ
Is there an income level below which no USC or PRSI is payable?
For USC: if your total income for the year is EUR 13,000 or less, you are fully exempt. If it exceeds EUR 13,000, USC applies from the first euro at the standard or reduced rates. For PRSI Class A: if your weekly earnings are EUR 352 or less in any given week, no employee PRSI is deducted for that week. These thresholds operate independently -- you could be exempt from USC but still pay PRSI (or vice versa depending on the timing of your earnings within the year).
Does USC apply to rental income as well as employment income?
Yes. USC applies to most types of income including employment income, self-employment income, rental income, and occupational pensions. Income from the Department of Social Protection (such as Jobseekers Benefit) is generally exempt, as are certain other social welfare payments. If you receive rental income on top of PAYE earnings, both sources are combined for USC purposes and the standard band rates apply to the total. Revenue.ie publishes the full list of USC-exempt income types.
What PRSI class applies to me, and does it affect my benefit entitlements?
The most common class for private-sector employees is Class A, which provides the broadest benefit entitlements including the State Contributory Pension, Jobseekers Benefit, Illness Benefit, and Maternity Benefit. Civil and public servants hired before certain dates may pay Class B, C, or D PRSI with different rates and entitlements. Self-employed individuals pay Class S PRSI. Your PRSI class is determined by your employment type and shown on your payslip. You can check your full PRSI contributions record via MyWelfare.ie.
When does the October 2026 PRSI rate increase take effect, and by how much?
All PRSI rates increase by 0.15 percentage points from 1 October 2026. For Class A employees, the employee rate rises from 4.2% to 4.35%. Earnings paid before 1 October 2026 remain at 4.2%; the new rate applies to earnings on or after that date. USC rates are unchanged. The increase is part of a phased annual plan to fund the long-term sustainability of the State pension and wider social insurance fund.
⚠️ Informational estimate, not tax advice. Payroll software may differ in edge cases. Verify with a professional.