Budget 2027: higher-rate threshold rises €2,500 to €46,500 and main tax credits go up €125
Harris announced that the standard-rate band rises by €2,500, so the 40% rate starts at €46,500 for a single person (Irish Times, Irish Examiner, TheJournal, RTÉ). The personal, employee and earned income tax credits each rise by €125, and the home carer credit by €100. A USC band ceiling rises by €1,600 to €30,300. The standard rate of capital gains tax falls from 33% to 31% for disposals from 7 October (Irish Times, Raisin). RTÉ called the tax package larger than expected; the Irish Times put reductions at €1.65 billion and Raisin put income tax at €1.3 billion. Chambers set spending growth at 6%. Sinn Féin called the changes an "insult to workers".
Income tax is the largest part of what most workers lose from a pay packet. A higher threshold and bigger credits mean more take-home pay without a pay rise, though inflation at 3.9% eats some of it.
A single worker earning above the threshold keeps more of each extra euro, and the €125 credit increase is worth €125 to every employee before tax. The effect shows up in January pay.
The Government says the package gives workers real relief and keeps spending within a stated limit.
Sinn Féin and others argue the gains are too small against the cost of living, and the Fiscal Council says the plan leans on risky corporation tax.
Work out your own gain from the threshold and credits together. For most employees it is a few hundred euros a year, which is roughly what Harris promised, and well short of what inflation takes.
DailyDrop Ireland edition No. 3 · Morning · WED., OCT. 7, 2026