Budget 2026, announced on 7 October 2025, is one of the most consequential in recent years. It arrives as Ireland navigates rising business costs, demographic change, and the ongoing transition to a more sustainable and digital economy. For Budget 2026 Ireland small business owners, the focus is clear — higher employment costs balanced by improved investment supports and targeted reliefs.
Beyond business measures, Budget 2026 Ireland small business policy also fits within a broader national plan. The Government has prioritised housing, healthcare, education, childcare, and climate investment, signalling a shift toward long-term, structural reform. Public capital spending continues to rise, with major funding set aside for green energy projects, digital infrastructure, and regional development. Increased supports for childcare, public transport, and sustainability initiatives are designed to ease household pressures and strengthen Ireland’s economic resilience.
For business owners preparing for the year ahead, understanding how Budget 2026 Ireland small business measures affect operations, payroll, and planning is essential.
Here’s a breakdown of the confirmed Budget 2026 Ireland small business measures and what they mean for you.
🔑 Key Framework & Fiscal Context
The Budget 2026 Ireland small business package includes €9.4 billion in new spending and tax measures.
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Focus areas: housing, energy, digitalisation, education, infrastructure, and SME growth.
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Shift away from once-off cost-of-living supports toward long-term, structural policies.
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Continued contributions to the Future Ireland Fund, helping stabilise national finances.
📘 Source: Government of Ireland – Your Guide to Budget 2026
👩💼 Self-Employed & Sole Traders
What’s changing:
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USC: The 2% USC band increases by €1,318 to €28,700, keeping minimum-wage earners within the lower bracket.
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Rent Tax Credit: Extended until 31 December 2028.
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Investment & Funds Tax: Exit and Investment Undertaking Tax reduced from 41% to 38%, also applying to certain offshore and life policies.
📘 Sources:
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RTÉ Budget 2026 Summary — https://www.rte.ie/news/budget-2026/2025/1007/1537266-budget-2026-summary/
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Tax Policy Changes Book (PDF) — https://assets.gov.ie/static/documents/beb5bc84/Budget_2026_Tax_Policy_Changes_Book.pdf
👉 What this means for you: A modest boost in take-home income through USC changes and more flexibility for reinvestment. However, PRSI increases and cost pressures remain important to plan for.
🏢 Micro & Small Limited Companies
Key points:
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R&D Tax Credit rises from 30% to 35%, with the first-year refund cap increasing to €87,500.
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VAT Changes:
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VAT on food, catering, and hairdressing services cut to 9% from July 2026 (previously 13.5%).
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9% VAT rate on gas and electricity extended to 31 December 2030.
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Housing & Regeneration: Continued support through the Living City Initiative and a 9% VAT rate for apartment construction.
📘 Sources:
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Irish Times — https://www.irishtimes.com/your-money/2025/09/27/budget-2026-what-we-know-so-far-about-octobers-package/
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Government Expenditure Report — https://assets.gov.ie/static/documents/12e55341/Expenditure_Report_2026.pdf
👉 What this means: Stronger R&D incentives will support innovation and cash flow for Budget 2026 Ireland small business firms, while VAT reductions will help service-based companies improve margins.
👔 Employers & Labour Costs
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Minimum Wage: Increasing from €12.90 to €14.15 per hour from 1 January 2026.
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Auto-Enrolment (My Future Fund):
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Launches 1 January 2026.
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Contributions: 1.5% employer + 1.5% employee + 0.5% State (on earnings up to €80,000).
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Employer PRSI: Gradual increases continue as part of pension reform.
📘 Sources:
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RTÉ — https://www.rte.ie/news/budget-2026/2025/1007/1537266-budget-2026-summary/
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Citizens Information — https://www.citizensinformation.ie/en/money-and-tax/pensions/auto-enrolment
👉 Impact on Budget 2026 Ireland small business employers: Payroll costs will rise through wages, pensions, and PRSI. Early planning, accurate bookkeeping, and clear payroll systems are essential.
👩🎓 Employees
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USC band increase ensures minimum-wage earners avoid higher USC rates.
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Rent Tax Credit extended to end-2028.
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Auto-Enrolment deductions begin 2026 — reducing net pay slightly but supported by employer and State contributions.
📘 Source: Government of Ireland — https://www.gov.ie/en/department-of-public-expenditure-infrastructure-public-service-reform-and-digitalisation/publications/your-guide-to-budget-2026/
📊 Snapshot: 2025 vs 2026
| Area | 2025 | 2026 (Confirmed) |
|---|---|---|
| Minimum Wage | €12.90/hr | €14.15/hr |
| USC (2% Band) | €27,382 | €28,700 |
| Auto-Enrolment | Not yet launched | Starts Jan 2026 (1.5% employer + 1.5% employee + 0.5% State) |
| R&D Tax Credit | 30% / €75k cap | 35% / €87.5k cap |
| VAT (Food & Services) | 13.5% | 9% from July 2026 |
| Energy VAT | 9% (temporary) | 9% extended to 2030 |
| Rent Tax Credit | Active | Extended to 2028 |
| Exit/Investment Tax | 41% | 38% |
💡 What This Means for Your Business
For many owners, Budget 2026 Ireland small business measures confirm a higher-cost but higher-support environment — a year of transition that rewards good financial planning and accurate bookkeeping
To stay on top of the changes:
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Ensure your books and payroll reflect updated wage and PRSI rates.
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Track R&D spending properly to qualify for the 35% credit.
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Review your VAT setup if you operate in hospitality, services, or energy-heavy sectors.
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Keep your monthly accounts current to react quickly to new reliefs or reporting requirements.
✍️ Final Word from Rizfin
Budget 2026 Ireland small business measures mark another step toward a modern, higher-sustainability economy — but they also bring heavier compliance and record-keeping responsibilities for business owners.
At Rizfin, we help you keep your financial systems in shape — ensuring your books, payroll, and processes are aligned with Revenue and compliant with new legislation. We’re not tax advisers, but we partner with small business owners to bring order, accuracy, and confidence to your financial operations.
📌 Need help getting your books in line for Budget 2026?
Rizfin can help you stay organised, compliant, and ready to make the most of the new measures.
👉 Contact us today to prepare your books and payroll for a smooth start to 2026.
