We wish to advise you of an important PRSI payroll change taking effect from 1 October 2026.
Both employer and employee PRSI rates will increase by 0.15 percentage points. These changes will affect employees’ take-home pay and employers’ payroll costs.
- New Rates from 1 October 2026
The following rates will apply to most employees paying Class A PRSI:
| Current Rate | New Rate | |
| Employee PRSI | 4.20% | 4.35% |
| Employer PRSI – lower rate | 9.00% | 9.15% |
| Employer PRSI – higher rate | 11.25% | 11.40% |
The lower employer rate applies to weekly earnings up to €552, while the higher rate applies to earnings above €552.
Employees earning €352 or less per week remain exempt from employee PRSI.
- How Much Will the Increase Cost?
For an employee earning €1,000 per week, the changes will have the following impact:
| Description | Before 1 October | From 1 October |
| Gross weekly pay | €1,000.00 | €1,000.00 |
| Employee PRSI | €42.00 | €43.50 |
| Employer PRSI | €112.50 | €114.00 |
| Total PRSI | €154.50 | €157.50 |
This represents an additional €1.50 per week for the employee and €1.50 per week for the employer.
Over a full year, this equates to an additional €78 for the employee and €78 for the employer, assuming 52 weekly payments.
- Company Directors and Self-Employed Individuals
The rates for company directors who are liable to Class S and for self-employed individuals will also increase.
| PRSI Category | Current Rate | New Rate |
| Class S | 4.20% | 4.35% |
| Class K | 4.20% | 4.35% |
For self-employed individuals filing annual income tax returns, the blended Class S rate for the 2026 tax year will be 4.2375%, subject to the applicable minimum contribution and other relevant rules.
Important – Please Notify Your Employees and become even more unpopular
We recommend that all employers notify their employees of the increase before processing their October payroll.
Employees should be made aware that the additional PRSI deduction will result in a small reduction in their take-home pay, even where their gross salary remains unchanged.
This is a statutory increase introduced by the Government and is not a change to employees’ agreed salaries or wages.
Our payroll team at Payroll Services will ensure that the revised rates are applied to payrolls we process from 1 October 2026. If you have any questions about these changes or their impact on your payroll, please contact us.
If you ever need a Quote for Payroll services, just click here (and scroll to the bottom)
Kind regards,
Kevin Barry & Co. Payroll & Tax Services known as Paylab
