USC and PRSI in 2026, explained
Income tax gets the attention, but two other deductions shape Irish payslips: the Universal Social Charge and PRSI. Both work differently from income tax, and from each other.
USC: bands on your whole income
| Slice of income | Rate |
|---|---|
| First €12,012 | 0.5% |
| Next €16,688 (to €28,700) | 2% |
| Next €41,344 (to €70,044) | 3% |
| Balance | 8% |
Earn €13,000 or less and you pay no USC at all, but one euro over and USC applies to everything, a genuine cliff edge. Pension contributions do not reduce USC: it is charged on gross pay. Full medical card holders and over-70s with income under €60,000 pay reduced rates.
PRSI: the October steps
Class A employees pay 4.2% on all earnings, rose to 4.35% on 1 October 2026, one of the annual steps funding the pension system through 2028. Two reliefs protect low pay: earnings of €352 or less a week are exempt entirely, and a tapered credit of up to €12 a week phases out by €424, so PRSI fades in rather than jumping.
What PRSI buys you
Unlike USC, PRSI is insurance: your contributions build entitlement to the State Pension, jobseeker's and illness benefit, maternity/paternity benefit, and treatment benefits like dental check-ups. Gaps in your record can cost pension later, worth checking your contribution statement on MyWelfare.
All three together
On €45,000 (single, 2026): €5,200 income tax + €883 USC + €1,907 PRSI = €7,990 total, leaving €37,010 after tax. The calculator shows the blended-PRSI assumption we use for the October change; details on the methodology page.
Frequently asked questions
What is the USC exemption threshold in 2026?
If total income is €13,000 or less you pay no USC at all. One euro above that and USC applies to the entire income, making it one of the sharpest cliff edges in the Irish tax system.
What is the PRSI rate for employees in 2026?
Class A employees pay 4.2% up to 30 September 2026 and 4.35% from 1 October 2026, part of annual increases scheduled through 2028. Earnings of €352 or less per week are exempt, with a tapered credit up to €424 a week.
What benefits does paying PRSI entitle you to?
PRSI contributions build entitlement to the State Pension, jobseeker and illness benefit, maternity and paternity benefit, and treatment benefits including dental check-ups. Gaps in your record can reduce your future pension entitlement.
Sources: Revenue USC thresholds 2026; DSP PRSI rates. Last updated 2026-11-04. General information, not tax advice.