PAYE Explained Ireland 2026
How Income Tax is collected — bands, credits, and what affects your take-home pay.
How Income Tax is collected — bands, credits, and what affects your take-home pay.
PAYE (Pay As You Earn) is the system Revenue uses to collect Income Tax from employees through payroll, every time you are paid. This guide covers the 2026 rate bands and credits, how your employer knows what to deduct, worked examples for different households, and the most common reasons PAYE comes out higher than expected.
Income Tax is the tax; PAYE is the collection method. Your employer does not decide how much tax you pay. Revenue sends your employer a Revenue Payroll Notification (RPN) that holds your tax credits, your standard rate cut-off point and your USC rate bands. Payroll applies those figures to each payslip and reports the deductions to Revenue in real time on or before payday. This real-time reporting has been in place since PAYE Modernisation in January 2019.
You can see and change what Revenue holds for you in myAccount under PAYE Services. If you add a credit there (rent, medical expenses, a flat-rate expense), Revenue issues a new RPN to your employer and the change shows up on your next payslip.
Income up to your standard rate cut-off point is taxed at 20%. Everything above it is taxed at 40%. The cut-off depends on your household:
| Your situation | Taxed at 20% up to | Taxed at 40% |
|---|---|---|
| Single or widowed, no dependent children | €44,000 | The balance |
| Single or widowed, qualifying for the Single Person Child Carer Credit | €48,000 | The balance |
| Married or civil partners, one income | €53,000 | The balance |
| Married or civil partners, two incomes | €53,000, increased by the lower of €35,000 or the second earner's income (maximum €88,000) | The balance |
The increase for a two-income couple cannot be moved between spouses. A couple where one partner earns €80,000 and the other €10,000 gets a cut-off of €63,000, not €88,000.
Bands give you gross tax. Tax credits are then subtracted euro for euro, so a €2,000 credit is worth €2,000 whether you pay 20% or 40%. Credits are not refundable: if they exceed your gross tax, the unused part is lost. The main 2026 credits for employees are:
| Credit | 2026 value | Who gets it |
|---|---|---|
| Personal Tax Credit (single) | €2,000 | Every resident individual |
| Personal Tax Credit (married or civil partners) | €4,000 | Jointly assessed couples |
| Employee (PAYE) Tax Credit | €2,000 | Each person with PAYE income |
| Single Person Child Carer Credit | €1,900 | The principal carer of a qualifying child |
| Home Carer Tax Credit | €1,950 | Couples where one spouse cares for a dependant (reduced if the carer earns over €7,200) |
| Rent Tax Credit | Up to €1,000 (€2,000 for a couple) | Private renters, claimed through myAccount |
See Tax Credits Ireland 2026 for the full list, including age, blind person's and dependent relative credits.
These show Income Tax (PAYE) only. USC and PRSI are charged separately on top; the salary calculator shows all three together.
| Household | Gross tax | Credits | PAYE for the year |
|---|---|---|---|
| Single, €35,000 | €35,000 × 20% = €7,000 | €4,000 | €3,000 |
| Single, €60,000 | €44,000 × 20% + €16,000 × 40% = €15,200 | €4,000 | €11,200 |
| Single parent, €40,000 | €40,000 × 20% = €8,000 (cut-off €48,000) | €5,900 | €2,100 |
| Married, one income of €60,000 | €53,000 × 20% + €7,000 × 40% = €13,400 | €6,000 | €7,400 |
| Married, €50,000 + €30,000 | €80,000 × 20% = €16,000 (cut-off €83,000) | €8,000 | €8,000 |
The single €60,000 earner and the one-income married couple on €60,000 pay very different PAYE: €11,200 versus €7,400. The couple's wider band and the doubled Personal Credit are worth €3,800 a year. That is why two people on the same salary can see different take-home pay.
Most employees are taxed on a cumulative basis: each payslip looks at your pay, credits and cut-off for the year to date. If you were overtaxed earlier in the year, for example during unpaid leave, the next payslips refund it automatically.
On a week 1 (or month 1) basis, each pay period stands alone and unused credits do not carry forward. Revenue uses it in some cases, such as when credits are added late in the year. Any overpayment is then settled after the year ends.
Emergency tax applies when your employer has no RPN for you, usually in a new job before you have registered it in myAccount. If you gave your PPS number, the first four weeks get the weekly single cut-off at 20% with no tax credits. From week five, everything is taxed at 40%. Without a PPS number, 40% applies from the start. USC is also charged at the emergency rate. Registering the job in myAccount ends emergency tax, and the excess comes back through payroll.
After each year ends, Revenue issues a Preliminary End of Year Statement in myAccount. When you complete it and claim any credits you missed, Revenue issues a Statement of Liability showing whether you overpaid or underpaid. You can claim refunds for the previous four years, so in 2026 you can still go back to 2022.
PAYE is the collection method; Income Tax is the tax itself. USC and employee PRSI are also deducted through payroll, but they are separate charges with their own rates.
A single employee with the standard €4,000 of credits pays no Income Tax on income up to €20,000, because 20% of €20,000 is exactly €4,000. USC can still apply above €13,000 and PRSI above about €352 a week.
On the cumulative basis, payroll corrects for earlier periods, so a refund or a catch-up can change one payslip. A new RPN from Revenue, after you changed credits in myAccount, has the same effect.
Yes, by claiming every credit and relief you qualify for, and through pension contributions, which get tax relief at your marginal rate. Check your entitlements in myAccount rather than guessing.
Updated: October 2026. Figures reflect Budget 2026 rates for the 2026 tax year. This guide is for information only and is not tax advice; Revenue's myAccount shows the figures that apply to you.