If you employ people, you'll know the cost of doing so has only gone one way in recent years. Wages, energy, insurance and the time spent keeping on top of payroll rules all add up, and the minimum wage is rising again in January.
Budget 2027 doesn't make those pressures disappear, but it does offer two practical wins for employers: a lower PRSI bill for many staff and a lighter reporting load. Here at Gilheany & co , we've set out what's changing and what it means for your business.
Lower employer PRSI
As an employer, you pay a lower rate of PRSI for staff earning up to a weekly threshold, and a higher rate on the full pay of anyone earning more. For 2027, that threshold is going up from €552 to €600 a week.
The reason is the minimum wage. Without this change, many full-time staff on or near the new minimum wage would have tipped over the old threshold, pushing your PRSI bill up on top of the pay rise itself.
The Government says the change will save employers between €650 and €700 a year for each employee earning below the new threshold who would otherwise have paid the higher rate. If you have a team on similar pay, that can add up quickly: five staff could mean a saving of over €3,000 a year.
There's nothing you need to apply for. Your payroll software should pick up the new threshold from January, but it's worth checking your first payroll run of the year to make sure it has.
Less payroll admin
Since 2024, employers have had to report certain tax-free payments to staff, like small benefit vouchers, travel and subsistence expenses and remote working allowances, to Revenue in real time. For many small businesses, it's been one more job to squeeze into a busy week.
The Government has listened to the feedback. From January, you'll be able to choose whether to keep reporting in real time or switch to a single monthly return instead.
If real-time reporting suits you and your systems already handle it, you can carry on as you are. But if you've found it a chore, monthly reporting could free up some valuable time, and we'll be happy to help you decide what works best once the full details are published.
Also worth knowing
Paid by a public body? If you provide professional services to the HSE, a Government department or another public body, 20% is currently taken off every payment as Professional Services Withholding Tax. That flat rate is being replaced with personalised deduction rates, which should mean less tax held back and better cash flow, though it will start on a date still to be confirmed.
Childminders. If you mind children in your own home, the amount you can earn tax-free under the Childcare Services Relief is going up by €5,000 to €20,000. The limit on how many children you can mind under the relief is also being removed, giving you more flexibility to help local families.
Getting ready for January
With a new minimum wage, a new PRSI threshold and a choice to make on payroll reporting, January is a good time to give your payroll a once-over. The team at Gilheany & co can help you check your figures, plan for higher wage costs and make sure you're getting every saving available, so just get in touch.
